North Asia ex-Japan has continued to be the location of a number of dynamic capital markets deals, with issuers and arrangers with strong credit in the region over the past year being able to close deals, execute transactions and secure the funding needed to support their respective businesses, despite volatile and uncertain markets, geopoliticial tensions or weaker investor sentiment, finds The Asset’s board of editors in its review of submissions for The Asset Triple A Sustainable Finance Awards 2025.

China

This was the case for some Chinese issuers with strong credit, which sought to tap the onshore renminbi bond market due to cheaper funding costs versus the G3 bond market. Though areas like the Chinese high-yield market remained shut following the fallout from the Chinese real estate market several years ago, there was a noticeable, exciting shift that saw Chinese issuers aiming to diversify their traditional funding avenues.

For example, several Chinese issuers during the review period were actively exploring offerings involving offshore renminbi ( CNH ), otherwise known as dim sum bond or Hong Kong dollar financing. While liquidity isn’t as deep as the US dollar bond market, issuers were exposed to a new set of investors, mostly comprised of banks and fund managers.

There is an expectation that the CNH market, in particular, will grow as China’s trade partners, primarily those in Southeast Asia, are looking for somewhere to deploy their CNH. Dim sum bonds issued during the first half of 2024, according to the Hong Kong Monetary Authority, experienced a year-on-year increase of 93% from 205 billion yuan ( US$28.2 billion ) to 396 billion yuan. 

Nevertheless, Chinese issuers were still present in the international G3 bond market in 2024. They actually took back the top position from South Korean issuers in the first nine months of 2024. Chinese issuers raised US$58.08 billion in total, according to LSEG data, up from US$38.59 billion. In 2023, South Korean issuers issued the largest amount of G3 bonds in the Asia ex-Japan region.

In addition to fundraising, M&A activity in the world’s second-largest economy was a patchwork of activity. While there was nothing to compare with the peak of deal activity in 2016, there were some interesting trends in the market. These included state-owned enterprise-led deals involving domestic consolidation or joint ventures. In general, inbound merger and acquisition ( M&A ) activity into China has paused due to uncertainty around government regulations in certain sectors.

Financial sponsors that have held Chinese assets for long periods of time, according to M&A advisers that spoke to the board of editors, are entering the end of their lifecycles with exits expected in 2025.

Hong Kong

In neighbouring Hong Kong, the market was equally as dynamic with many pinning their hopes in early 2024 on the recovery of the city’s stock market, essential in providing a solid foundation for expected future high-profile listings in the territory.

Despite the seesaw performance of the Hang Seng Index for most of 2024, the benchmark ended up being one of the best performing in Asia towards the end of last year, thanks in part to China’s economic stimulus announcements in September 2024. If the equity market remains stable, initial public offiering fundraising in Hong Kong, PwC predicts, will reach HK$130 billion ( US$17.8 billion ) to HK$160 billion in 2025. 

Similar to mainland China, Hong Kong-based bond issuers were active in the bond market, with frequent issuers across both corporate and government entities tapping not only the US dollar bond market but also local currency ones, including those denominated in CNH and Hong Kong dollars.

There was also some notable M&A activity in the city as well with several companies looking to go private due to a disconnect between valuations and expectations of shareholders. Moreover, several conglomerates were looking to reposition themselves, divesting from their non-core businesses.

South Korea

There was a similar situation in South Korea, which saw the traditional chaebols in the country doing non-core divestment that has been coupled with significant buyouts from private equity firms for these disposed units. Unlike the domestic equity market in South Korea, which had its bouts of volatility, the country’s bond market was particularly active with issuers frontloading their fundraising plans ahead of the change of administration in the United States.

These included a number of high-quality issuances, both conventional and sustainable, across financial institutions, corporates and government-linked organizations. As one South Korean-based banker explains: “Issuance from the country reflects the desire of issuers here to move into the SSA [sovereign, supranational and agency] bond space appealing to high-quality investors.

Taiwan

Finally, Taiwan – home to Asia’s best-performing equity market, the Taiex, which returned close to 30% for 2024 – was the setting for several key equity-linked and global depository receipt deals that saw the island’s technology companies leverage on favourable investment demand around artificial intelligence.

When it came to bonds, insurance companies were fairly active during the review period, issuing capital-qualifying bonds to bolster their capital positions to comply with IFRS17, a new accounting standard set to come into force in 2026.    

These were just several of the trends observed by the board of editors at The Asset as part of our Triple A Sustainable Finance Awards 2025.

For the complete list of Best Banks/Advisers in North Asia, please click here.

For the complete list of Best Deals in North Asia, please click here.

Reach out to us at celebrate@theasset.com if you’re interested in attending our awards gala scheduled for March 19 2025.