Western Asset, a subsidiary of Less Mason, has predicted that demand for Asian bonds will stay firm, based on sound fundamental and a longterm macro-economic shift.
Looking at Asian bonds, Western Asset said the region has improving structural fundamentals, with strong government balance sheets, balance of payments surpluses and reduced external debt dependence. It added that investors taking a long-term strategic view should benefit from exposure to Asian debt. Chia-Liang Lian, portfolio manager of the Legg Mason Western Asset Asian Opportunities Fund, said that five emerging Asian countries are in the top ten globally for having the largest foreign reserves – China, Taiwan, Korean, Hong Kong and India. He added that he has a favourable view of Singapore, Malaysia and the Philippines, and is comfortable being long duration versus the benchmark. Looking at China’s prospects, Lian commented: “I expect Chinese GDP growth to moderate to a stillrespectable 7.5% for the whole of 2012. The slowdown is partly cyclical, and partly structural. Longer term, sustaining Chinese growth would require a reorientation toward domestic sources of demand, particularly as consumers play a greater role in the economy going forward.”