We are all familiar with the challenging market environment for credit last year that was plagued by decades-high inflation stemming from residual supply chain disruptions and shockwaves in the energy markets arising from the ongoing Russia-Ukraine conflict. This led to central banks raising policy interest rates and expediting quantitative tightening plans that were originally in place to deal with the flush liquidity arising from the pandemic stimulus. Consequently, business activity slowed slightly towards the end of the year, measured by declining quarterly GDP readings and unemployment rates creeping upwards.
Despite this, the Singapore dollar (SGD) credit market remained largely resilient, with issuance volumes totaling around $22 billion. While this is still 12% short from the some $25 billion issued in 2021, it is not a bad outcome, all things considered, and especially when looking at performance in the Asiadollar space. Fundamentally, SGD issuance volumes in 2022 were largely supported by higher credit quality issues, mainly from financial institutions and government-linked issuers (including statutory boards and Singapore’s publicly-funded universities, and excluding the sovereign).
