Emerging markets corp debt issuance hits $26 trillion in H1-survey

lunes 26 de septiembre de 2016 15:20 GYT

By Dion Rabouin

NEW YORK, Sept 26 (Reuters) - Emerging markets nonfinancial corporate debt rose to more than $26 trillion in the first half of the year, moving to more than 100 percent of the sector's total gross domestic product, according to a survey released on Monday.

The Institute for International Finance (IIF) reported that debt issued by emerging market corporates during the first half of the year rose by $1.6 trillion as firms continued to take advantage of a growing appetite for emerging market debt, which generally boasts higher yields than comparable debt issued by companies in developed markets.

Debt per adult in emerging markets is estimated to be around 60 percent higher than its level in 2010, with China, Saudi Arabia, Thailand and Korea witnessing the largest build-up in household debt per adult since 2010.

The most pronounced rise in issuance came from China, Saudi Arabia and Poland. Brazil, Hungary and Russia recorded the largest declines.

"In addition to widely acknowledged risks to financial stability, the continued rise in debt - combined with weak investment spending - also raises concern about potential misallocation of resources," the IIF said. "A growing share of the proceeds from new borrowing has been deployed in sectors where there is already too much capacity - notably in China."

Global debt, across the household, government, financial and non-financial corporate sectors, rose by more than $10 trillion in the first half of 2016, surpassing $216 trillion, or 327 percent of global GDP.

The rise was most pronounced in the non-financial corporate sector, which rose by $3.3 trillion to over $63 trillion, and in the government sector where issuances rose by $3.3 trillion to near $59 trillion.

Mature market debt is quickly approaching 400 percent of GDP, the report found, with the issuance of total debt across mature market sectors increasing by $8 trillion to over $163 trillion during the first half of the year.

That moved the level of debt to 393 percent of GDP in developed markets, more than 50 percentage points higher than a decade ago. (Editing by Jeffrey Benkoe)