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Speaker & Video Profile

  • Speaker & Video Profile
  • Executive Overview
  • Key Drivers of Asian Credit Resilience
  • Top Regional Opportunities & Sector Picks
  • Global Bond Dynamics & De-Dollarization Trends

On this page

  • Speaker & Video Profile
  • Executive Overview
  • Key Drivers of Asian Credit Resilience
  • Top Regional Opportunities & Sector Picks
  • Global Bond Dynamics & De-Dollarization Trends
Fixed Income/May 29, 2026/2 min read/youtu.be

Prefer China, South Korea in Asia credit: JP Morgan | 29 May 2026 | CNBC International Live

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Speaker & Video Profile

  • Subject Matter Experts: Lim Soo Chong - J.P. Morgan, Head of Asia Credit Research [00:00:00]
  • Data Context: Broadcast date May 29, 2026. Analysis tracks active macro metrics, focusing on a 0.1% default rate and a 64% US dollar global market dominance benchmark [00:01:13; ].

References

  1. Original source (youtu.be)

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Reading

Published
May 29, 2026
Read time
2 min read
Progress0%
00:04:08

Executive Overview

Despite widespread market expectations at the onset of global conflicts that Asia would be uniquely vulnerable to energy shocks, Asian credit markets have markedly outperformed global peers [00:00:00]. While macro headwinds persist, a combination of strong bottom-up corporate fundamentals, a massive sovereign buffer, and structural shifts in regional capital flows have insulated the asset class [00:00:43]. Notably, Asian credit has outperformed its closest global counterpart, US Investment Grade (IG) credit [00:02:06].


Key Drivers of Asian Credit Resilience

  • Robust Corporate Fundamentals: Bottom-up metrics remain highly stable. The corporate credit rating upgrade-to-downgrade trend remains structurally positive across the region [00:00:55].
  • Minimal Default Rates: The default rate for the current year is tracking at a historically low level of approximately 0.1% [00:01:13].
  • Sovereign Capital Cushions: Roughly 60% of Asian credit is government-owned or state-backed [00:01:31]. As long as sovereign ratings hold steady, these corporate credit structures benefit from an implicit state backstop [00:01:37].
  • Capital Export Dynamics: Asia has structurally evolved into a net exporter of capital [00:01:48]. Local investment demand continually outstrips supply, creating a powerful captive regional investor base that buffers the market from foreign capital flight [00:01:54].

Top Regional Opportunities & Sector Picks

  • China Credit Market: China remains a favored pick due to domestic demand and significant technical tailwinds [00:02:51]. Onshore Chinese banks are heavily deploying their domestic liquidity into the US dollar-denominated bond market [00:02:57].
  • South Korea & Tech Exports: South Korea is highlighted as a top credit destination [00:02:26]. Korean issuers tied directly to the global Artificial Intelligence (AI) boom are experiencing significant positive momentum, driving strong earnings profiles and successive positive rating actions [00:03:08].
  • Other Export Outperformers: Strong structural export data continues to uplift the overall regional credit profile, specifically driven by economic hubs like Taiwan, Japan, and Singapore [00:02:26].

Global Bond Dynamics & De-Dollarization Trends

  • The Dollar Dominance: Despite ongoing institutional discussions regarding macro "de-dollarization" and a desire for asset diversification, the US dollar remains the undisputed bedrock of global credit, commanding roughly 64% of the entire global credit market [00:03:50].
  • Rise of Alternative Issuance Hubs: Regional issuers are seeking targeted diversification away from pure USD dependencies, leading to rapid expansion in alternative bond markets [00:04:13]:
    • CNH (Offshore Chinese Yuan) Market: Seeing an influx of trade-related issuance, foreign corporates, and sovereign entities tapping the market [00:04:20]. High-growth Technology, Media, and Telecom (TMT) companies are notably extending bond tenors here [00:04:45].
    • Australian Dollar (AUD) Market: Gaining significant traction and investor attention due to highly competitive yields relative to US dollar credit, augmented by attractive underlying currency elements [00:04:57].

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