Betting on Asia’s debt, Europe’s hunt for yield heads east | Malay Mail

Asia is the only region Goldman Sachs Asset Management says it expects to grow this year, and as a consequence, it forecasts junk default rates at 4 per cent compared to 8 per cent in the United States for 2020. — Reuters pic

“Now people are looking for the valuation gap to close,” said Hayden Briscoe, head of Asia-Pacific fixed income at UBS Asset Management. Like elsewhere Asia’s junk bond spreads, the premium over safer assets that buyers demand for riskier debt, have narrowed sharply since March. Asia is the only region Goldman Sachs Asset Management says it expects to grow this year, and as a consequence, it forecasts junk default rates at 4 per cent compared to 8 per cent in the United States for 2020.

“The dominant sector is really the Chinese property names,” said Tiansi Wang, Senior Credit Analyst at Dutch fund manager Robeco in Hong Kong, adding the well-capitalised industry is driven by supportive domestic factors.

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