Arthur Lau, head of Asia ex-Japan fixed income, and Emily Lam, client portfolio manager, at PineBridge Investments, highlight the continued appeal of Asia investment grade (IG) as well as high yield (HY) bonds for their relatively stable and attractive source of yield and diversification.
Despite Evergrande's woes, Allianz is still bullish on Chinese property and infrastructure, although it has slowed down its investment process.
Evergrande admits it may not have enough capital to repay its debt.
Unable to access China's distressed assets directly, international private debt buyers have tied up with local partners and are building teams to identify opportunities.
A combination of relatively strong economic fundamentals and appealing yields is attracting the attention of asset owners in the region and beyond.
Institutional investors in Europe are looking to invest more into emerging market high yield bonds in an effort to boost returns, despite the additional risk they entail.
The firm's director of asset management sees Asian debt as a good post-Covid opportunistic play, but Spanish insurer Mapfre is put off by weakening Asian currencies.
Insurance firms in Asia and elsewhere have moved to take advantage of pandemic-driven spread widening on both high yield and investment grade debt.
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?
Asian investment-grade bonds may be less at risk of downgrades to junk than those elsewhere, but asset owners – particularly insurers – are being advised to take precautions.
Investors hunting for higher-yield fixed income might have better luck with Asian high-yield debt. But what are the caveats?