Banks from China, Taiwan and the Middle East are lapping up Indian corporate paper in the overseas loan syndication market.
Dealers said these banks have become more aggressive of late as uncertainty in the Asian markets has restricted the supply of good paper.
Issues from Reliance Industries, Great Eastern Shipping, Union Bank of India, Bank of Baroda and the Indian Railway Finance Corporation have found favour.
Ravindra Kumar, senior executive vice president, Calyon Bank, confirmed the good appetite for liquid Indian paper but said their pricing has to be realistic and in line with the market trend.
This is because some corporates have been pricing their paper at fine spreads over Libor, which makes it difficult to offload them in the secondary market.
As a natural corollary, demand is pushing the yields on these papers down. Banks in China and Taiwan are struggling to reduce the non-performing assets.
They perceive Indian issues to be creditworthy and better rated in terms of corporate governance and fundamentals, said a dealer monitoring the overseas bond markets.
Banks which have already invested in Indian paper include China Commercial Trust, the Land Bank of Taiwan and the Chiang Tung Bank of Taiwan. Meanwhile, banks form the Middle East too are showing interest in Indian paper as they are flush with funds following the oil price hike.
The banks actively trading in Indian paper in the overseas secondary market include Bank of Muscat, Bank of Oman and the Arabian Banking Corporation.
Chinese and Taiwanese banks are also game for papers from public sector banks and enterprises that have quasi-sovereign backing. The Middle East banks, on the other hand, are bullish on oil and gas company issues.
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