China High Yield
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DATE
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TUESDAY, 22 FEBRUARY 2022
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| Title | China High Yield |
| Moderator | Ng Shin Seong Head, Investment Strategy & Advisory Standard Chartered Bank Malaysia |
| Speaker(s) | Vanessa Chan Vanessa Chan | Investment Director Fidelity International |
| Key Takeaways | 1. Property is an important sector that makes up about 30% of China’s GDP. The sector which accounts for ~ 48% of the China high yield bond sector faced significant refinancing pressure and slowing retail property sales.
2. To stem widespread slowdown, Chinese regulators have begun lowering policy rates, cutting reserve requirement ratios for banks and encouraging banks to loan to mortgagees.
Chinese bad debt managers have been engaged to step in to manage debt restructuring and developers are now given easier access to escrow funds. These policy support provides a backstop against concerns over debt maturities in 2022.
3. While the HY sector default rate has risen to historical high, the fund manager remains committed to pay regular monthly income to investors, which remains a key contributor to total return. |