High-yield sector needs to diversify

Asia’s capital markets have come a long way, especially in the investment-grade space, but the same cannot be said for the high-yield sector.

Asia’s high-yield sector needs to diversify beyond China, according to bankers at Haymarket’s fifth Annual Borrowers Investors Conference held in Hong Kong on Thursday.

Year-to-date, Chinese issuers account for 84.5% of total Asia ex-Japan G3 high-yield issuance while for investment-grade Chinese issuers account for 40.5%, followed by South Korea 28.2% and Hong Kong 23.9%, according to Dealogic data.

In terms of sector breakdown, Chinese property dominates the total Asia ex-Japan G3 high-yield sector, accounting for 81.1% of total share year-to date. For investment-grade, financials come on top with 40.8%, followed by property with 27.2% and utility and energy at 11.4%, adds the data provider.

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