Chinese and Indian credit markets focus of Asia Hedge Funds

November 14th, 2007 - 10:14 am ICT by admin  
Nearly 80 percent of the largest Asia-focused hedge funds are investing in China and India’s credit markets, reflecting the growing importance of the Asia Pacific region to the 2.5 trillion dollar hedge fund industry worldwide.

The study, which gauged the market and product preferences of Asia-focused hedge funds active in credit markets, revealed that trading in certain products is limited by low liquidity, but that fund managers expect a steady maturation of the credit market throughout the region. The investment preferences of 60 of the largest Asia-focused hedge funds were examined for the study.

The study also shows that, in addition to trading a range of credit products, Asia-focused hedge funds are investing heavily in special situations and private placement deals, indicating growing confidence in the financial prospects of an array of the region’s emerging corporations.

“A favorable environment for hedge funds continues to develop in Asia,” said Bradley Ziff, director of the hedge funds advisory practice at Oliver Wyman. “Not only are there more than 600 funds domiciled in Asia, but hedge funds have become an important part of the capital equation that is central to the growth of Asian economies.”

Hedge funds see more reward than risk in developing credit markets

Five of the top 10 most-attractive Asian markets for credit-focused hedge funds are developing countries. After China and India, the most attractive emerging credit markets for hedge funds are Philippines, Thailand and Indonesia. The growth prospects for infrastructure, utilities, and commodities companies are fueling hedge fund trading of credit products in these countries. (ANI)

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