The Singapore dollar corporate bond market showed signs of improved vitality in the first quarter, helped in part by greater clarity on interest rates.
This may pave the way for what banks hope will be a livelier year after a tepid 2015, but expectations may be tempered by persistent market volatility and concerns of bond default looming in the background.
There were 37 issuances in the three months to March 31, with a combined deal amount of around $5.65 billion - 16.9 per cent higher than the same period last year.
DBS - last year's top deal maker for Singdollar debt - continued to claim the lion's share of the market. In the first quarter, it managed 21 deals as sole or joint book runner, helping to raise around $2.82 billion, Bloomberg data showed.
OCBC came second, with a market share of 10.82 per cent, having $610 million from six deals credited to its name. Deutsche Bank was third, with two deals and $425 million, and HSBC was fourth, with with $337.5 million from four deals.
Market sentiment has improved from last year as there are fewer jitters around the United States interest rate hikes, DBS head of fixed income Clifford Lee told The Straits Times.
He said: "This year, we started with its fair share of volatility, but we have at least one uncertainty taken away, after the first hike was announced by the Federal Reserve in December.
"In terms of supply, real estate firms and banks have been the key drivers, like last year. What is also encouraging for us is that we are seeing a few substantial deals and foreign participation. That may be a sign of the market opening up."
DBS itself was a major issuer, having launched a combined $730 million in debt in the quarter. Dutch bank ABN Amro had a $450 million issuance in March, jointly arranged by DBS, HSBC and Standard Chartered.
Mr Sean Henderson, HSBC's deputy head for Asia-Pacific debt capital markets, said: "The relative depth of the Singdollar market has often seen the largest issuers using the offshore markets. However, deals like the ABN Amro issue demonstrated that depth in the Singdollar market can be achievable."
Meanwhile, local companies - particularly in the property sector - have not shied away from the Singdollar debt market. Ascendas had three issuances that totalled $375 million, City Developments did a $115 million issuance last month, and Perennial rolled out a $125 million deal through a subsidiary in the same month.
Other Singapore names included Singtel, with a $250 million deal in February, and Aspial, whose $200 million retail bond issued last month generated a good deal of market buzz with an unusually high annual yield, or coupon rate, of 5.3 per cent.
Deals in the pipeline look to be in good shape, Mr Henderson said, adding: "Some borrowers have been keen to build in a buffer ahead of potential volatility... with the Brexit vote and a number of key elections due in Europe and the US."
DBS' Mr Lee said: "We do still expect volatility in the market... structural changes in China and the price swings in the commodity market will easily spook people and shut up market windows in a hurry."
As the bond market seeks its footing in an improving but still uncertain landscape, concerns around Singdollar bond defaults have also come to the fore, following news over the past half year that PT Trikomsel and Pacific Andes Resources Development had missed their yield payments.
OCBC credit analyst Andrew Wong said: "Default risks will depend heavily on company-specific factors, but a few industries will be under pressure.
"In particular, we continue to watch the offshore and marine sector closely, given that oil prices remain weak and... fundamentals remain challenging, resulting in pressure on cash flows and margins."