A changing investor base and profile, preference for non-China IG bonds and dwindling supply could be the three technical trends that will underpin 2H2016 Asian credit strategy, believe UBS analysts. Edwin Chan and colleagues said in their June 16 research piece titled “The Asia Credit Analyzer-What steal the show” that they expect U.S. Fed Fund rates to be hiked 25bps each in September and December.
Asian IG corporate spreads to widen by 10bps by year-end
Chan and team believe a changing investor base and profile could put the bonds in steadier hands with more Asia-centric buying. The analysts expect the continued preference for shorter-dated bonds to further steepen the 5/10 curve, which could provide opportunities in the 10-year bonds:
The...
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