Asia high-yield to plough through head winds

Diverging monetary policies, weaker valuations and an uncertain regulatory environment will affect Asian high-yield into 2015 but these risks will likely be short-lived.

Several big global themes are at play going into next year and are likely to weigh on Asian high-yield credit markets.

Monetary policy is expected to diverge between some key developed markets and emerging Asia. That combined with weaker valuations in the high-yield sector, lack of clarity towards certain regulations in the region and potential credit problems could shed an unwelcome light on higher risk, indebted Asian companies. 

“We expect corporate fundamentals to come under scrutiny in 2015,” Krishna Hegde, head of Asia credit research at Barclays, said. “Many corporates have raised debt levels amid the low interest rate environment and as the wall of maturities...

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