Decoupling of the Asian and European markets earlier in 2012 has seen Asian corporate bonds cement their appeal with investors, according to specialist fixed income investment manager Omega Global Investors (Omega).
Demand for Asian corporate bonds is expected to increase over the next 12 months.
Omega managing director George Vassos said the corporate bonds are underpinned by strong fundamentals, bringing with them a strong, long-term positive outlook.
“We expect to see an increased demand for Asian corporate bonds over the coming year as growth in the region continues,” Mr Vassos said.
“We’re particularly looking at corporations issuing bonds in countries such as Malaysia, Thailand, Taiwan, Korea and Singapore that are showing signs of maintaining that growth over the next few years,” he said.
Mr Vassos added that Asian corporations have strong balance sheets when compared with their global sector peers – and with less risk, which makes them an attractive option for investors looking for superior risk-adjusted returns.
“Banks are just one example,” he said. “The European and US banks have certainly had their issues over the last few years and those are continuing.
“On the other hand, their Asian counterparts, such as ICICI Bank and OCBC Bank, have experienced strong growth, strong balance sheets and have a far more positive long-term outlook with a lower probability of downgrade or default.”
