China’s high-yield bond market has been under incredible strain in recent months, with prices tumbling by nearly 40% since May. We’ve worked with our economists and LGIM’s high-yield team to determine whether this represents a deep value opportunity or trap.
Last week, we laid out why we believe China is unlikely to be sitting on a property bubble that is about to deflate. But not everything is hunky-dory. Migration to the cities is slowing, and there are only so many decrepit homes to knock down. The trend seems towards less construction in future years. ;
Evergrande’s problems have placed the Chinese property sector front and centre of investors’ minds. The sector is undergoing a sizeable credit crunch, several developers have missed coupon payments, and home sales are down 38% year-on-year. How bad can this get? To answer the question, we look at the fundamentals of China’s property sector. ;
Not so long ago, the trade war between the US and China was the greatest geopolitical risk facing the market. COVID-19 has taken its place at the front of investors’ minds, but it hasn’t eased the underlying tensions – and may have exacerbated them. ;