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Asia Junk Bond Rally Still Has Legs

2018-09-10, Jim Veneau, AXA Investment Managers Asia Ltd believed in further gains for the Asian dollar junk bonds even after a stellar rally in August.

Why?  

  1. the market has reached some stability after a sell-off in the first half of the year and many investors have cash ready to be deployed.

  2. Since hitting 18-month lows in mid July, Asian high-yield bonds have staged a strong comeback as China’s easing measures rekindled investor bets that default risks from the nation’s risky issuers will recede.

BB rated notes is preferred among Asian dollar junk bonds for attractive returns relative to risk.

Despite the recent recovery in Asian junk bonds, average yields are about 240 basis points higher than the start of the year, according to an ICE BofAML index.

Reference:

Bloomberg, Annie Lee & Carrie Hong, 2018-09-10, “AXA Says Asia Junk Bond Rally Still Has Legs, Likes BB Names”

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