UBS maintains a balanced stance on Asia credit, favoring select high-beta credits while retaining core exposure to IG financials and China. The strategy focuses on yield enhancement and opportunistic plays following recent rates volatility.
Key Takeaways
- 1.Asia credit remains resilient to recent US Treasury yield volatility, with both IG and HY segments posting healthy returns.
- 2.High beta credit outperformed due to improved risk sentiment following the US-Iran deal.
- 3.The team made specific adjustments to top picks, including removing Vedanta 9.125% 2032 and Pertamina 2.3% 2031, while adding Vedanta 7.375% 2034, PLN 5.45% 2036, and Bank of East Asia 5.375% 2032.
Table of Contents
- Asia credit not shaken by recent rates volatility
- Moderate Asia HY exposure can improve portfolio resilience
- Higher-beta credits outperformed amid improved risk sentiment
- Adjustments to our Asia bond top picks
- Asia credit positioning
- Key risks
- UBS CIO risk views
- UBS CIO valuation views
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Authors
Joel TanDevinda ParanathanthriEve Li
Securities
Vedanta Resources 7.375% 2034Alibaba Group 4.500% 11/28/2034
Themes
Geopolitical RiskYield Enhancement
Regions
Asia PacificChinaIndonesiaIndia