살아남을만한 기업에 베팅할바엔 fixed income쪽으로, another bubble 거시巨視

살아남을만한 기업에 베팅할바엔 fixed income쪽으로, another bubble  거시巨視 / 일(勞)    2013. 1. 15. 10:33  수정  삭제 https://blog.naver.com/paulcjkim/120178296721 통계보기

처음으로 Wall Street Journal WSJ 소개차원에서 올려본다

저작권에 문제 일으키고 싶은 생각은 전혀 없다. 한경/매경 등 한국 신문은 정말로 자유롭다

하지만 FT는 정말 까다롭다. 그래서 부분 발췌 및 transcript정도로 머물려고 한다

Asian ‘Junk’ Bonds Find Eager Buyers

 

By Fiona Law

Asia’s booming bond market is extending last year’s pace of record issuance, with even the riskiest Chinese property companies easily selling debt in 2013.

Global investors are looking to Asia, Latin America and Eastern Europe for high yields amid rock-bottom interest rates in developed economies. Emerging-market debt funds saw inflows of $2 billion from around the world last week, the second-largest on record, according to data provider EPFR Global.

That has helped fuel demand for seven Asian high-yield, or “junk,” bonds worth US$3.2 billion since the start of the year—a record for issuance in the first two weeks of a year, according to data provider Dealogic.

Chinese property developers have dominated the list, tapping the markets for refinancing and land acquisitions, as the outlook for the real-estate sector improves in the world’s second-largest economy.

And even with the large supply, demand is exceeding supply. Investors placed orders for 24 times the US$750 million of 10-year debt sold by Country Garden Holdings Co. 2007.HK +1.96%, one of China’s largest developers, based in the southern province of Guangdong.

Another notable deal came from midsize developer Hopson Development Holdings Ltd. 0754.HK +1.73%’s US$300 million five-year bonds. The paper was rated triple-C-plus by Standard & Poor’s, deep in “junk” territory and reflecting the debt-laden developer’s weak sales. Despite that, the bond was sold at a yield of 9.875%, a level some analysts regard as too low for paper with such a rating. Nevertheless, the bonds have performed strongly since they began trading last week, and prices have risen faster than those of other issuers, pushing down yields.

“There’s still a lot of issuance in the pipeline. With huge capital inflow to the region, I don’t think the robust market will reverse anytime soon,” said Jacphanie Cheung, a credit analyst at Deutsche Bank DBK.XE -0.72%.

The optimism for debt is continuing even as investors return to stocks amid signs the global economy is recovering. A broad Asia equity index, the MSCI All Countries Asia Ex-Japan index, rallied 4.9% last quarter and is up 1.4% so far this year.

“Institutional investors still favor fixed income, as the jump in equity market could be vulnerable to external shocks,” said Arthur Lau, head of fixed income in Asia excluding Japan at PineBridge Investments, who has bought some property bonds for some of the funds he manages. “Cash inflow to the region has been substantial, while there’s not enough assets to deploy.”

The strong reception for Asian bonds extends to investment-grade issuers. Hong Kong developers with investment-grade ratings also have sold debt. Blue-chip Sun Hung Kai Properties Ltd. sold a US$497 million 10-year bond at a yield of 3.699% Lai Sun Development Co. 0488.HK -4.35%, a local hotel operator, sold a US$350 million bond. Both sold bonds with yields below initial guidance amid strong demand.

Among other investment-grade Asian borrowers, Korea’s Kookmin Bank sold a US$300 million three-year bond at a yield of 1.44%.

To be sure, returns for bond buyers could turn negative if markets turn sour. At the end of 2011, for instance, most bonds from Chinese developers were already trading at distressed levels, when the countries’ authorities tightened policies to curb housing prices. That slowed home sales, and some debt-laden developers faced financial problems, causing their shares and bond prices to tumble.

But in today’s cash-rich environment, fund managers are still confident.

“I’m cautious to use the word ‘bubble.’ We are in an exceptional market now,” said Gregor Carle, Hong-Kong-based fixed-income investment director at Fidelity Worldwide Investment, which has $289.4 billion under management. “It’s definitely not the end of the world for fixed-income markets. It’s just the beginning.”