Asia high-yield to come under pressure

The underperformance of Asia’s high-yield sector in recent weeks is partly due to concerns about the Chinese property industry and worries of more supply in coming weeks, say syndicate bankers.

Asia’s investment grade sector held up last week as spreads grinded around 5bp tighter for Korea, China and Hong Kong. Spreads were overall little changed for India and Southeast Asia, according to Goldman Sachs in a report released on May 5.

The stable investment grade performance was reflective of favourable market sentiment towards this sector as the market well digested one of the heaviest weekly issuance this year, totalling $7.9 billion, adds Goldman. This indicates strong appetite...