Asian dollar bond rally could extend its run, propelled by yield-seeking investors

The recent rally in Asian dollar bonds has room to run further as yield-seeking investors scramble to get exposure to this asset class with interest rate cuts looming on the horizon, fund managers said.

The yield premium on Asian dollar bonds – compensation for the credit risk – has tightened for four straight weeks and touched a fresh record low on Wednesday, according to a Bloomberg index tracking both investment-grade and high-yield bonds. Junk-rated bonds from Chinese issuers are among the biggest gainers with a 5.2 per cent return this month, an ICE BofA Index showed.

Source: TRADE FINANCE