The early weeks of 2025 suggested markets are picking up where they left off at the end of the previous year: ample liquidity and generally favourable issuance conditions for good-quality borrowers despite periodic volatility prompted by a febrile geopolitical environment. Australia’s high-grade issuers enter the year with plenty of funding to do and – in the case of semi-governments – heightened scrutiny on their debt burdens. KangaNews and National Australia Bank gathered a group of female leaders from the issuer and investor spaces to discuss the market outlook.

The second Trump administration is already empowering anti-environmental, social and governance sentiment in the US as evidenced by the withdrawal of a raft of American banks and asset managers from global compacts on the subject. Even so, Australian asset managers say they are confident the local sustainable finance market has developed enough sophistication and momentum to ride out the backlash – even in the event of a local change of government.

In October, in a KangaNews Women in Capital Markets Yearbook first, KangaNews and RBC Capital Markets brought together Australian semi-government and Canadian high-grade issuers, and Australian institutional investors to discuss the increasing crossover between the two borrower sectors and how they fit into global capital markets.

The KangaNews Corporate Debt Summit 2024 took place on 17 October, a matter of weeks after the Australian dollar corporate bond market passed its record for full-year issuance volume (see p21). Speakers discussed the prospects for a newly vibrant local debt funding option, and an economic and business environment where cautious optimism is the mood of the day.

For the past five years, Commonwealth Bank of Australia and KangaNews have conducted an annual survey of Australian fixed-income investors on their views of the key issues in sustainable finance. The 2024 survey shows investors are facing a range of challenges in the sector – hurdles the market will need to overcome if it is to deliver on its potential and maximise the amount of capital it can mobilise to support the transition.

Thinking in global markets is turning hard to the nature of the looming inflection point for monetary policy. Central banks may not cut, or at least not far, unless the pain being felt in global economies metastasises into unemployment and other symptoms of spare capacity. Despite this uncertainty – and many others – issuers were able to make hay in H1, including in an Australian market that has experienced unprecedented scale and consistency of demand. Participants at the annual ANZ-KangaNews global funding roundtable, which took place in London in June, surveyed the landscape.

Clearer policy direction, the development and implementation of a local taxonomy and mandatory climate reporting, and the impending inevitability of energy transition seem set to turbo charge the Australian sustainable finance market. Speakers at the KangaNews Sustainable Debt Summit in Sydney on 19 March discussed the economic and market impact of this inflection point.

One of the main hopes when the first Australian green bond came to market was that demand would evolve to support – or even require – exponential growth in labelled issuance. While this has not come to pass, investor strategies for incorporating sustainability in fixed-income investing have evolved significantly. KangaNews speaks to a range of investors, from specialist funds to the largest mainstream asset managers, to get a perspective on a decade of development and the outlook.

The first Australian sovereign green bond achieved a quantifiable greenium for the Australian Office of Financial Management but speculation outside the deal group that it might deliver a blowout book did not come to pass. Support built primarily in the Australian time zone, though deal sources insist an overnight price revision masks solid demand out of Europe.

The leading social event for the fixed income market in Australasia, the KangaNews Awards Gala Dinner, returned to the Ivy Ballroom in Sydney on 19 March. The dinner celebrated the achievements of the winners of the KangaNews Awards 2023, including the announcement of the KangaNews Market People of the Year 2023.