Macro Research The Asian high yield bond market is pres | FSMOne SG - Research Highlights

Macro Research

The Asian high yield bond market is presenting attractive value for long-term investors

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• Asian high yield bonds have gone through rough times, posting a return of -12.6% in 2021 due to China’s property crisis.

• On 16 March 2022, China has pledged more support for the property sector, which we believe should paint a better picture for the outlook of Chinese property credits, and hence the Asian high yield bond market.

• With Chinese property credits trading at distressed levels and the widen spreads in the Asian high yield bond market, we think that heavy risks of default are likely already priced in, and the risk-reward is skewed to the upside.

• Moreover, Asian high yield bonds provide one of the highest yield per unit of duration, which can potentially provide some buffer to offset the rise in interest rates.

• All things considered, we continue to hold a positive view on Asian high yield bonds.

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: Eastspring Investments - Asian High Yield Bond ASDM SGD-H / Blackrock Asian High Yield Bond A8 SGD-H / Premia China USD Property Bond ETF (HKEX:9001)