December saw the seventh consecutive monthly net redemption "“ NZ$1.6 billion.

NZ$707 million of uridashi bonds were issued, compared with $2.3 billion maturing (of which $747 million were uridashi and NZ$1.6 billion were eurokiwi/global). There was no issuance of NZD eurokiwi or global bonds in December.

For the whole of 2008, $16.4 billion in bonds matured, and only $11.3 billion were issued, leaving a net $5.1 billion that were redeemed.

Eurokiwi/global issuance has declined, relative to uridashi in recent months, with only four issues totalling $700 million since May 2008. For the whole of 2008, only 25% of the issues were eurokiwi.

"Our concern is uridashi appetite could soon come under similar pressure," said Imre Speizer, Currency Strategist at Westpac Institutional Bank.  "In Q1 2009, NZ$4.6 billion will mature, but there is only one deal in the pipeline "“ a NZ$206 million Uridashi for IFFIm arranged by Daiwa. Lower relative NZD yields, and Japanese funding pressures, point to future outflows from this asset class," he said.