A monthly review and outlook of the Asian Quality Bond market.

Key highlights - as at January 2016


  • The continued collapse in oil price, concerns over China’s growth and the inability of the Chinese authority to control the stampede in the A share market all presented the perfect ingredients for the storm in risky assets as we begin the New Year.
  • Total return for investment grade bonds was positive for the month, outperforming the negative return delivered by high yield.
  • As widely expected, the US Federal Reserve (the Fed) held the Fed Funds target rate steady at the 0.25%-0.5% range set in mid-December 2015.
  • Challenging times are ahead for Asia though we see some bright spots. Reforms in China, India and Singapore are long-term positive despite the near term growth uncertainty.
  • Longer term growth prospects in Asia remain intact and return from local currency bonds especially the high yield Indonesia and India will likely outperform those of developed market if investors are able to take a longer term view and ride out the current volatility.

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