There comes a moment where Asia’s high-yield bond investors urged to adapt to the market turbulence and many defaults occurring in Chinese property sectors. Analysts argued that in order to calm the investors down, they need to be more transparent. In addition, there should be an easier local policy especially for Chinese property sectors in order to succeed in the housing market. The challenging market conditions have inflicted a rise in rates as well as geopolitical turmoil. So it has led to the general risk-off attitude.
A founder and chief Investment officer at Triada Capital, Monica Hsiao, a Hong Kong-based asset manager gives remarks. She said that there is a lot of lack of confidence shown on the side of investors. In the Chinese property sector for instance, when there is a buyer’s boycott in physical markets, they also have a boycott in investors. The investors are especially in the high-yield bonds. Therefore, the dollar capital market has ended to new issuance. As a result, the crisis occurring in China’s property sector inflicted challenges in the primary market activity.
Worse, there are many growing pressures for developers from the authorities to deleverage. The case is, deleverage could impact many failure projects as well as unpaid debts. Moreover, some buyers have quitted paying mortgages especially for the unfinished projects. In addition there have been shortages in the housing demand due to the red tapes in zero-Covid policies. The arrival of US dollar high-yield bond issuance is mostly from the Chinese property sector. Then, the volume has decreased since the defaults loomed. Meanwhile, the high yield US dollar bond volume in APAC has dropped in 2021.
