04/08/2019

Diamond Capital Management (Switzerland) Ltd.

Investors like Asia HY Bonds especially from Chinese Property developers

Please find below an CNBC article about the risk appetite for China RE / HY Bonds. We have been positive throughout of last year already as we invested in the top quality RE developers only, and have reiterated our positive view end of last year on the basis of strong fundamentals. Updated March Factsheet of our Angsana Asia HY Bond fund to follow later this week (YTD up 5.76%).
Summary of the article:

  • Chinese property developers dominated the issuance of U.S. dollar-denominated HY bonds in the 1Q of 2019
  • In a sign of greater risk appetite by investors this year, many HY bonds issued by Chinese developers in the 1Q come with longer maturities (2-3 year maturities – longer than the less than 1 yr notes commonly seen a year ago)
  • BlackRock, Pimco and UBS are among investors who say high-yield bonds by Chinese property developers are an attractive investment this year.
  • Best performing Asian HY bonds were from Chinese RE developers – further room to perform
  • Underlying fundamentals to remain supportive
  • Further measures expected from the CB to relax property market restrictions and boost consumption
  • Fed has stopped hiking rates and several Asian CBs are providing more support to their economies, which is positive for risk assets in Asia

Big-time investors are snapping up China's junk bonds
https://www.cnbc.com/2019/04/08/investors-like-asia-high-yield-junk-bonds-by-china-property-developers.html
Angsana Bond Fund