LATE last year, as Japan’s equity market was being hammered as its economy was feeling the heat from the US financial crisis, there remained one safe haven – its retail corporate bond market. Viewed as safer than stocks given that it provided relatively steadier returns and was not vulnerable to the wild swings of foreign exchange, retail investors were flocking to invest their monies in the bond market.
In turn, many blue-chip companies for the first time started to tap the retail bond market to raise funds as over at the primary bond market, institutional investors were gripped by severe risk aversion, having been burnt elsewhere. In fact, in December alone, seven companies issued retail corporate bonds (rated investment grades with little risk of default) totalling nearly 600 billion yen (about RM166.8bil), 27 times the amount a year ago!
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