Despite the negative sentiment surrounding the Korean consumer credit sector, there are still market participants that are more bullish on a Korean securitization revival than they are on the possibilities of an emergence of an active securitization market in Hong Kong. Although the Hong Kong government has given a positive endorsement to securitization, they say they will have to see securitization being utilized, before they actually believe it!
The Hong Kong securitization market has been sluggish for a number of years, with only a few transactions completed last year. In March of last year, the Hong Kong Mortgage Corporation launched its inaugural issue from its securitization programme Bauhinia MBS Ltd, and there was also a credit card deal by Nihon Hong Kong. Market participants point to the fact that corporates still benefit from attractive commercial banking rates and that the banks themselves are flush with cash, therefore there is no need to access the securitization market.