It looks like Asian investors' appetite for fixed-income assets in the region continues to grow, as this year 70.3% of the 680 respondents to our fixed-income poll said they were hungry for more -- as opposed to 61.9% holding that view last year. Given the non-stop deal flow in the market, this of course is no surprising result.
But investors are signalling that they will likely be more cautious next year -- at least when it comes to high-yield assets. Only a touch more than half (52.4% versus 47.9% last year) say they will increase their exposure to Asian high-yield next year.
On the ratings upgrade front, investors are buying into Indonesia's story, with a whopping 59.7% expecting to see a sovereign credit upgrade this year -- of course 39.5% were hopeful last year as well.
Investors' views on potential ratings downgrades have changed, however. Vietnam, with the ever increasing pressure on its currency a headline story, tops the list this year. Last year, Thailand was a major concern, but as you can see from our table below, it slips behind the Philippines on the radar this year.
Ever the pessimists, we asked a new question this year: Which country is likely to experience the most corporate debt defaults? China leads that category, with Vietnam and Indonesia close behind in second and third place. Given these are countries where transparency is often an issue, the results should come as little surprise.
For more results of our fixed-income poll, please see days one through three on our website and also look out for the 2010 Bond Markets Guide, which will be published as a supplement to the upcoming November issue of FinanceAsia magazine.