As Good As It Gets ?

September 2004 | Bond Sentiment Index

With banks being drawn towards higher-yielding credits, the Asia BSI fell by 0.9 points to 93.5 this month. The main casualty was South Korea. Its index fell by 6 points to an underweight reading of 97.0, due to CSFB moving from marketweight to underweight. However, HSBC has upped its exposure to South Korean quasi-sovereign bonds, reflecting a defensive strategy to Asian credit spreads in general. The bank expects onshore players to provide support for the paper. To fund its overweight in South Korea, HSBC has pared back its position in Malaysia, where it thinks bond valuations are growing increasingly unattractive.

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