Investment in Asian bonds expanding rapidly as investor base is diversifying
Chia-Liang Lian gives his assessment on Asian credit. Demand for this class has gone through the roof. Via Pimco:
•In recent years, the Asian credit asset class has expanded to cover 15 fast-growing countries, with sovereign ratings ranging from AAA to B−. Seven countries in the Asia-Pacific rim received rating upgrades in 2010.
•The emergence of high yield corporate issuers reflects a confluence of factors in Asia: rapid GDP expansion, broad political stability, an underdeveloped infrastructure, a move toward privatization and a growing need for funding flexibility.
•While the U.S. remains a major source of investor interest in Asian credit, demand has rippled out to non-U.S. participants, and the hunt for greater investment exposure will likely continue.