Video PlayerClose NEW YORK, Nov. 25 (Xinhua) — Chinese bond market continues to be attractive to foreign investors thanks to higher yields and appreciation of RMB, according to multiple experts. China’s enterprise bond spreads, especially with high-yield ones, are still above their historical average and should compensate for a gradual rise in the overall rate of credit market defaults under an orderly deleveraging scenario, said Mark Haefele, chief investment officer of UBS Global Wealth Management, in a recent research note. Haefele forecasted the default rate in the overall onshore China credit market would inch up to around 1.6 percent in 2021, up from 1.2 percent at present, driven by strong gross domestic product but slower credit growth. While recent credit events will result in losses for holders of select Chinese corporate bonds, “they have no impact on our overall constructive view on Chinese assets,” said Mehran Nakhjavani, managing partner of global strategy with MRB Partners Inc. recently. Haefele noted that credit differentiation would increase, which makes selection increasingly important. “We continue to like Asian high-yield credit, which offers some of the most attractive yields in the credit space,” said Haefele. The valuation of China’s high-yield bonds is attractive with default… Read full this story
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