J.P. Morgan (NYSE:JPM): Emerging Market Countries, Companies, Issue Half of Bonds in 2010

J.P. Morgan (NYSE:JPM) estimates that half of the bonds issued so far in 2010 have been issued by emerging-market countries, generating a total of $55 billion so far for the quarter, with estimates it could reach over $60 billion for the three-month period.

Figures from ING confirm this, as data show already close to $55 billion in bonds have been sold by entities from the developing world, which include not only governments, but companies too.

This continues the borrowing trend from last year, where emerging markets issued around $200 billion in bonds, which should be easily equaled this year, and could probably surpassed if they continue on at this pace.

That is questionable as the normal practice is for countries to lock in their financial needs in the early part of the year for the coming year, so there is always a lot of bond issuance in the first quarter. Still, there will be numbers and bond issuance very close to or slightly more than issued last year by emerging markets.

This isn’t surprising because at best the global economy is still flat overall concerning economic growth, so there isn’t going to be a significant increase going forward, even though there seems to be a growing appetite for more risk.

Factors like the sovereign debt debacle with a number of countries in Europe continue to weigh on the minds of investors, companies and countries everywhere, and a lot could happen which could devastate the global economy again, depending on how that all plays out.

Even major economic powers like the U.S, Britain, Germany and France are in danger of having their AAA-rating downgraded, according to Moody’s, showing the continuing severity and fragility of the global economy.

One interesting trend that has grown this year is in reference to the number of bonds issued by companies rather than governments, which have increased to almost 50 percent, according to estimates by J.P. Morgan, generating about $23 million so far.

For the entire year, Morgan projects emerging market companies will issue about $128 billion in bond for 2010.