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UOB: Asian credit markets to rebound this year 

May 28, 2014
Lee Weng Khuen, The Sun Post

UOB Asset Management expects Asian credit markets to rebound this year, supported by improving economic data and resilient corporate fundamentals, but China remains a key risk to the region due to hard-landing concerns.

According to its head of Singapore and Asia Fixed Income Chia Tse Chern, the Asian credit markets will typically do better after a poor year, which saw the total return dip by 1.4% in 2013.

"We expect the Asian credit markets to have tendency to strongly rebound in 2014, by registering high single digit growth in the base case, or even low double digit growth," he told a press conference in conjunction with the launch of UOB's United Trigger Bond Fund here yesterday.

Chia is still sanguine on the credit risk of the Asian bonds despite a big selldown last year and believes that the bond prices will gradually recover assuming there is no spike in default rate.

He stressed that among the emerging markets, Asian high yield bonds have the lowest default rate of 1.1%, demonstrating strong financial strength in Asian companies.

"There is no default recorded for investment grade bonds since the Asian financial crisis in 1997," he added.

Read more: The Sun Post

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