Global asset owners believe China fixed income will bring good returns in the next two years, despite tougher regulations and some high-profile companies getting into difficulties.
Asset class in focus: Asian fixed income
Asian bonds posted strong returns last year, but face an uncertain environment given changing US policy and expected Federal Reserve rate rises. Still, they offer relatively high yields.
The firm will soon roll out a Dublin-domiciled Asian fixed income product. It also expects more Japanese money to flow offshore and sees Philippine bonds as particularly attractive now.
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The fund house aims to capitalise on Japanese pension plans' growing interest in new investment types, including Asian fixed income and certain alternatives.
Asian fixed income has hit record levels of foreign ownership, but stickier offshore investors should preclude a 1997-style crash, says Western Asset's Lian Chia-Liang.
The Asian Development Bank warns that the region must improve bond market liquidity and cooperation or bond prices will suffer.
Global fund managers intend to go overweight Asian fixed income, according to a survey by HSBC. But sentiment on Asian equity is mixed.
A project supported by the Asian Development Bank seeks to produce incremental integration to fixed-income markets through standardised documentation.
Sean Chang, the firm’s new head of Asian debt investment in Hong Kong, says Baring Asset Management will focus more on its Asian fixed income business.
Sabita Prakash, head of fixed income at Fidelity Worldwide Investment, explains how European market turbulence is spurring the development of deeper fixed-income markets in Asia.
Dominique Jooris and Julian Trott of Goldman Sachs outline what needs to happen before Asian bond markets are fully developed.
Western Asset has hired Lian Chia-Liang to head its Asian fixed-income investment team in Singapore.
The firm has appointed Thomas Kwan from ICBC Credit Suisse to run its regional fixed income coverage out of Hong Kong.