According to S&P Global Ratings’ Ritesh Maheshwari, 2018 has so far been good for Asian bond markets, despite it generally being a “rough year”.
Describing the markets as possessing an “unmistakeable” momentum, Mr Maheshwari said governments and companies are extending the variety of debt offerings, and in turn, “global investors are positioning to grow their long-term presence in the region".
The managing director of market and franchise development’s commentary was informed by S&P’s global bond survey. The survey, conducted with HSBC, found that 91 per cent of global investors plan to increase their exposure to Asian credit markets in the next year. That’s up from the last four years’ 80 per cent average.
S&P said investors predict spreads will continue widening for sovereign and high yield debt, but remain optimistic, anticipating China’s economic growth will continue with a gradual slowing.
Investors also see infrastructure and telecoms opportunities, with default risk a minor concern.
The “surge” in interest is most apparent in non-Asian investors, with 88.2 per cent planning to increase exposure, reflecting a 12.8 per cent increase on the results from the second half of 2017.