Strong growth is generating demand for bonds, particularly from pension funds and insurance companies, he said.
ADB's quarterly Asia Bond Monitor assesses the bond markets of China; Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, Thailand and Viet Nam.
In 2011, the amount of outstanding government bonds grew only 2.5 percnet in local currency terms to 3.8 trillion US dollars, slowed by reducing fiscal stimulus programs.
But, outstanding bonds sold by banks and companies expanded by 17.1 percent to 1.9 trillion dollars.
This was slower than the growth rates in 2009 or 2010 but much higher than in the middle of the last decade.
"The pace of corporate issuance accelerated in early 2012, suggesting a swift pace of growth this year too," ADB said.Indonesia’s corporate bond markets grew the fastest at 28.0 percent, followed by 26.0 percent growth in the People’s Republic of China (PRC), and 13.4 percent in the Philippines.
Emerging East Asia’s contractual savings institutions – pension funds, insurance companies, and social securities institutions – were important buyers of the region’s corporate bonds.
ADB said their demand will increase as they seek higher returns and longer-dated investments than are available from government bonds.
Foreign interest in the region’s local currency bonds remained strong in most markets in 2011. But foreign holdings in Indonesia, which has the highest level in the region, leveled off at end-2011.
The maturity profiles of most sovereign bond markets improved in the second half of 2011 as governments sold more longer-dated debt.
By the end of 2011, for example, Indonesia, the Philippines, Singapore, and the PRC all had more than 20 percent of outstanding bonds in maturities of 10 years or more.
Countries with a greater concentration of longer-dated debt are less vulnerable to liquidity crunches, although there are few such concerns at this time.
Cross-border portfolio debt holdings in Asia remained low, though they had improved in recent years, ADB said.
