The paper highlights the investment case of investing into Asian Fixed Income as an individual asset class, supported by the recent development of Asian credit market and strong outlook within the region. View for more details.
The Outlook for Asia
The market outlook for Asia and how it translates into bond market demand remains positive according to our analysis. On the positive growth outlook remains constructive, inflation contained and central bank rates are not at zero (thus providing flexibility should growth decline). On the negative side is a growing
demographic pressure that will require the need to develop sustainable pension systems. We think about this in the context of a very strong growth in the size of the Asian USD credit market and the conclusion looking forward is that the demand dynamic for Asian Investment Grade credit should remain robust.
The Outlook for Economic Growth in Asia
No matter how you feel about Asia, the outlook for economic growth is inextricably connected to the fortunes of China. Early on in 2016 global financial markets have agonised at to the probability of a China ‘hard landing’. Yet as we look to 2017 as a guide, we see cause for the Chinese economy to be on stronger footing, helping the outlook for Asian. Whilst developed market growth remains tepid at best (even after years of quantitative easing), the outlook for growth in 2017 for ASEAN continues (ASEAN refers to The Association of Southeast Asian Nations, is the regional intergovernmental organisation comprising ten Southeast Asian states formed in 1967) to outperform other regions.
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