BlackRock predicts huge capital flows into China and Asia in the coming year under the low-yield situation. Income-generating assets keep shrinking, said Belinda Boa, head of active investments for Asia pacific and CIO of emerging markets, fundamental active equity. As policymakers cut rates to lessen the virus impact on the economy, China is seen as a clear beneficiary. The China-US nominal bond yield differential, has moved from 40 basis points two years ago to about 240 basis points, said BlackRock. As for the recent mainland’s state-owned enterprises’ credit default, Neeraj Seth, head of BlackRock’s Asian credit team, said the default rate will increase next year, but that it will have a positive impact on the development of China's bond market.

Source: The Standard November 26, 2020 08:14 UTC