Risky bonds were sold for more than $100 billion in Asia. The price is double what it was last year. Low interest rates of Central Banks did help the situation, too.
Global corporate bond market was attacked by persistent investors. In times when the most important global banks keep their interest rates extremely low, investors struggle to find opportunity where to put their free funds. As such, investors don’t hesitate to purchase risky and not so quality bonds.
Yet, large investment banks warn investors. However, possible yields are tempting and the capital more often leads to Asia risky bonds (so called “junk bonds“). The average yield in China is close to 13% annually. Such investment value to the assets with the current course exceeded the level of $100 billion. That is double the value of whole year 2018 and for now the highest volume in last 10 years.
According to American bank Morgan Stanley the situation will probably not repeat itself in the upcoming year. For example, Chinese authorities prepare some restrictions. Even this may be the reason why this year is record-high. Investors had enough time to join in the junk bonds fever.