UBS Remains Defensive On China’s Credit Bonds

Caveat emptor to buyers of China Credit Bonds, says a new report from a big investment bank. With limited breakeven spreads across all tenors and yield curves staying flat, one UBS analyst remains defensive on China’s credit bonds and prefers the high grades with short durations. Cynthia Cheng said in her January 12 research note entitled “China Credit Strategy” that she believes the concerns about liquidity condition and credit risk will continue to influence yields and spreads. China Credit Bonds – Major events add to China’s bond market volatility Highlighting the major action-filled events since the beginning of last month, Cheng…