UBS has upgraded Asia High Yield bonds to 'Attractive' while maintaining a positive outlook on Asia Investment Grade credit, citing strong diversification and low default rates.
Key Takeaways
- 1.UBS upgrades Asia High Yield (HY) to 'Attractive' due to a more diversified universe and falling default rates.
- 2.Asia Investment Grade (IG) remains 'Attractive' supported by strong corporate balance sheets and low net supply.
- 3.Asia credit has shown significant resilience through global shocks including Middle East tensions and 2025 tariff escalations.
Table of Contents
- Central scenario
- Against this backdrop, we upgrade Asia HY to Attractive
- We also keep Asia IG at Attractive
- Upside scenario
- Downside scenario
- Global asset class preferences definitions
- Appendix
- Risk information
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Authors
Adrian ZuercherChun Lai WuClarissa Teng
Securities
JACI CompositeCGB
Themes
Default Cycle CleansingYield Carry over Cash
Regions
Asia PacificChinaIndiaHong Kong