Asia's Junk Dollar Bond Pain to Last Through Year, Nomura Says

(Bloomberg) -- As emerging-market nerves flare up, Asian dollar corporate junk bonds have now lost more this year than the region’s investment-grade debt. More trouble may be on the way.

Asia’s high-yield bond market will “remain tough at least for the second half, if not going into 2019,” said Annisa Lee, head of Asia ex-Japan flow credit analysis at Nomura International (HK) Ltd. Fund flows into the sector aren’t good, while supply will likely continue, and that should lead to softer performance, Lee said.

Junk notes from companies in the region have lost 2.9 percent this year, compared with 2.4 percent for high-grade bonds, according to ICE BofAML indexes. High-yield Indonesian borrowers and Chinese property companies led declines on Wednesday.

--With assistance from Carrie Hong and Denise Wee

To contact the reporter on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net.

To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Beth Thomas

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