Sustainable Asia bonds: cutting through the noise

    Murray Collis, Chief Investment Officer, Fixed Income, Asia (ex-Japan)
    Eric Nietsch, CFA, Head of ESG
    Manulife Investment Management

    This year hasn’t been kind to the global fixed-income market, and the sustainable bond market in Asia hasn’t been spared. However, our conviction toward this asset class remains strong, and we expect current headwinds to weaken in the months ahead.

    Market assessment: a very unusual nine months

    It’s been a challenging year for financial markets. While news headlines may suggest that the balkanisation of the global economy is well under way, we remain very much in an interconnected world.

    Markets in Asia aren’t insulated from key events taking place elsewhere—these include the economic fallout emanating from Russia’s invasion of Ukraine, the withdrawal of monetary stimulus, and, crucially, the decision among most central banks (with the notable exceptions of the People’s Bank of China and the Bank of Japan) to use interest-rate hikes as the primary tool to contain inflation.

    Needless to say, these developments continue to have a profound impact on the region’s markets, but there are other Asia-specific issues that have also weighed on investor confidence, notably; mainland China’s property sector.

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