Fundamentals for high yield bonds are stronger than ever, but investors should be wary about the outlook for China’s property and financial sectors.
Fund sales will likely be impacted due to the negative investor sentiment resulting from the coronavirus, according to the HKIFA.
China continues to refine regulations aimed at opening its financial industry.
An examination of the holdings of equity funds authorised for sale to retail investors in Hong Kong finds that there is little enthusiasm for China bank shares.
Easing regulations for smaller lenders and M&A activities will drive US regional bank equities, argues Ryan Lentell, Boston-based portfolio manager at Manulife Asset Management.
China’s banks, despite a positive outlook, are not the best investments because they face increasingly hard competition from online giants running financial platforms, according to Greg Kuhnert, portfolio manager at Investec Asset Management.
Contingent convertible (coco) debt of European banks is mispriced relative to other bank debt and this presents an arbitrage opportunity, argues Marc Stacey, portfolio manager at Bluebay Asset Management.
The banking sector’s worrisome low valuations have the potential to spark a financial crisis, fund managers said.
Concerns over European banks facing systemic risks are overblown, but challenges such as negative rates are pressuring margins, according to Edmond de Rothschild Asset Management.
The mainland’s China Construction Bank has been added to the list of “global systemically important banks”.