Loomis Says Asian High-Yield Bonds Are ‘Definitely Overvalued’
(Bloomberg) -- Asian investment-grade bonds are not overvalued but high-yield bonds are definitely overvalued given overall spread vs. the amount of risk, Kevin Kearns, a money manager at Boston-based Loomis Sayles, says in an interview.
- Has favored Indonesia over the last 3-6 months
- “The challenge is in Asia you have so much money chasing everything so quickly”
- Wary of Chinese developers, expects yields on builder bonds to widen
- NOTE: Asia Junk Dollar Bond Market Turns as Low Rated Deals Stall
- Has favored EM since beginning of the year because Trump policy is a disaster in terms of getting anything to legislature
- Likes Argentina and Brazil dollar bonds
- “We expect EM to benefit significantly from the weak dollar so we have favored a lot of local-currency EM bonds since the beginning of the year. We still are in favor of that trade”
- “The question is coming into the Q4, if the central banks do start to taper, we wanna be quick to exit that position if rates start to rise significantly”
- “The biggest risk we face in the next 12-18 months is, if you take the geopolitical risk aside, the central banks and the end of QE”
- Earlier story:
- Loomis Wary of Chinese Bonds Without Better Creditor Protection
To contact the reporter on this story: Lianting Tu in Hong Kong at ltu4@bloomberg.net To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net Chan Tien Hin
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Kevin Kearns (Loomis Sayles & Co LP)
Topics First Word Credit Asia
First Word Credit US
To de-activate this alert, click
hereTo modify this alert, click
hereUUID: 7947283
