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.
Issuers and portfolio...
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