ICMA releases ex-Japan APAC repo market survey
26 January 2024 APAC
Image: YiuCheung/stock.adobe.com
The International Capital Market Association’s (ICMA’s) Global Repo and Collateral Forum (GRCF) has released survey results on the ex-Japan APAC repo market.
Outstanding value of repos and reverse repos on 14 June 2023 on the books of the survey sample was US$269.1 billion. Average daily turnover between 9 June 2022 and 14 June 2023 was US$12 billion.
These numbers are down on the previous year, with 2022 generating US$310.0 billion in outstanding value of repos and reverse repos and US$43 billion in average daily turnover.
The size of the survey in June 2023 was lower than the previous year, which reflected changes in the composition of the survey sample; in particular, the loss of two international banks from the survey sample and changes in regional bank participation.
For the first time, the report includes a snapshot of the onshore repo markets in China and India. These two economies are the second and fourth largest economies in the world and the two most populous countries, says ICMA.
The survey does not measure the size of domestic repo markets in the APAC region, but captures cross-border business involving internationally active banks.
According to the June 2023 survey, there were approximately 231,700 transactions over the year, of which 53.0 per cent were reverse repo.
The survey suggested modest growth in the outstanding value of the ex-Japan APAC repo market but declining turnover, which ICMA says implies more longer-term transactions.
In addition, the report found that triparty and central counterparty (CCP)-clearing repos played a “small and diminishing role” as repos tended to be cleared on a CCP after having been negotiated bilaterally between counterparties.
Cross-border business with APAC and non-European counterparties increased its share of the survey, while there was a shift in the allocation of collateral into Japanese government bonds (JGBs) and other APAC securities.
The US dollar remained the dominant currency in this repo survey, with JPY moving into second place ahead of the AUD. This reflects a corresponding shift in collateral composition, the survey notes
The survey was conducted alongside Asia Securities Industry and Financial Markets Association’s (ASIFMA’s) secured funding markets committee.
Commenting on the results, ICMA chief executive Bryan Pascoe says: “Since 2016, this survey has served as a valuable resource, providing insights into the dynamics of the Asia-Pacific cross-border repo markets.
“We hope that work such as this will continue to benefit our members, authorities and regulators and other market participants in the region.”
Philippe Dirckx, managing director and head of fixed income at ASIFMA, adds: “The survey shows the growing importance of repo across the region and the dynamics of its structure and stakeholders.
“Parallel to the survey, this edition includes, for the first time, a snapshot of the onshore repo markets in China and India. We have also asked our members their priorities in markets they are operating in and the new APAC markets on their radar. This edition is therefore as much a state of play as a roadmap for the region’s key stakeholders.”
Outstanding value of repos and reverse repos on 14 June 2023 on the books of the survey sample was US$269.1 billion. Average daily turnover between 9 June 2022 and 14 June 2023 was US$12 billion.
These numbers are down on the previous year, with 2022 generating US$310.0 billion in outstanding value of repos and reverse repos and US$43 billion in average daily turnover.
The size of the survey in June 2023 was lower than the previous year, which reflected changes in the composition of the survey sample; in particular, the loss of two international banks from the survey sample and changes in regional bank participation.
For the first time, the report includes a snapshot of the onshore repo markets in China and India. These two economies are the second and fourth largest economies in the world and the two most populous countries, says ICMA.
The survey does not measure the size of domestic repo markets in the APAC region, but captures cross-border business involving internationally active banks.
According to the June 2023 survey, there were approximately 231,700 transactions over the year, of which 53.0 per cent were reverse repo.
The survey suggested modest growth in the outstanding value of the ex-Japan APAC repo market but declining turnover, which ICMA says implies more longer-term transactions.
In addition, the report found that triparty and central counterparty (CCP)-clearing repos played a “small and diminishing role” as repos tended to be cleared on a CCP after having been negotiated bilaterally between counterparties.
Cross-border business with APAC and non-European counterparties increased its share of the survey, while there was a shift in the allocation of collateral into Japanese government bonds (JGBs) and other APAC securities.
The US dollar remained the dominant currency in this repo survey, with JPY moving into second place ahead of the AUD. This reflects a corresponding shift in collateral composition, the survey notes
The survey was conducted alongside Asia Securities Industry and Financial Markets Association’s (ASIFMA’s) secured funding markets committee.
Commenting on the results, ICMA chief executive Bryan Pascoe says: “Since 2016, this survey has served as a valuable resource, providing insights into the dynamics of the Asia-Pacific cross-border repo markets.
“We hope that work such as this will continue to benefit our members, authorities and regulators and other market participants in the region.”
Philippe Dirckx, managing director and head of fixed income at ASIFMA, adds: “The survey shows the growing importance of repo across the region and the dynamics of its structure and stakeholders.
“Parallel to the survey, this edition includes, for the first time, a snapshot of the onshore repo markets in China and India. We have also asked our members their priorities in markets they are operating in and the new APAC markets on their radar. This edition is therefore as much a state of play as a roadmap for the region’s key stakeholders.”
NO FEE, NO RISK
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
100% ON RETURNS If you invest in only one securities finance news source this year, make sure it is your free subscription to Securities Finance Times
