Market views: Does Asian high yield offer opportunity?
With spreads on Asian junk bonds having widened sharply, are they a good bet, despite widespread concern over expected corporate defaults in the coming months?
As the economic impact of the coronavirus rolls on, indiscriminate bond selling by investors has pushed Asian spreads outwards – arguably to levels that are wider than their fundamentals merit.
The JP Morgan Asia Credit Index currently offers a yield exceeding 400 basis points (bp) over US Treasuries – a level last seen in 2011 during the European Union debt crisis. The high yield credit component of the index has risen by 500bp to nearly 1000bp.
Strategists are warning that the…
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