“Credit investors should position for a potentially bumpy ride over the foreseeable time horizon,” said Paul Lukaszewski, head of corporate debt for Asia Pacific at abrdn in Singapore. “We continue to see China as our biggest source of credit risk in Asia.”
Just last week, a surprise proposal by state-backed Greenland Holdings Corp. to delay a bond repayment sparked fears of wider contagion risks among even higher-rated Chinese developers. Meanwhile in sovereign markets, Sri Lanka has fallen into default, while concerns are mounting over Pakistan.
Others are more optimistic, even on China. Asian corporate bonds will soon be attractive for investors who believe an economic slowdown remains a way off, said Neeraj Seth, head of Asian credit at BlackRock Inc. in Singapore.
“If you aren’t worried about recession right now, you are getting closer to the point where it’s an attractive entry point in the market from the credit or fixed income side,” he said in an interview on Bloomberg Television. “We are positive on investment grade credit and selectively on high yield” in Asia, he said.
--With assistance from Marcus Wong and Masaki Kondo.
This article was provided by Bloomberg News.