Asia bonds

Pitfalls ahead for unwary in Asian bonds

Borrowers and investors in Asia’s bond markets warn of liquidity crunches and currency mismatches ahead of a US rate hike.
The Fed set to shake Asia with rate hike
The Fed set to shake Asia with rate hike

Borrowers and investors in Asian emerging market bonds are increasingly worried about liquidity crunches and flash crashes as markets price in a US rate hike next year.

They noted the reduced role played by banks as lenders and bond traders, due to increased regulatory restrictions, will ratchet up volatility and trap some investors who wish to sell in a rush.

“When you see some of the concentrated positions in some of the names, it is a bit worrying,” said Owen Gallimore, head of credit research for ANZ, at FinanceAsia's Borrowers Investors Forum held in Singapore on October 30.

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