Chinese Long-Term Debt Seems Like The ‘Buy Of The 12 Months’, Says Ubs’ Asia Bonds Chief

Investors are not looking closely enough at the compelling investment opportunities that China’s inverted yield curve is throwing up, says UBS’ chief regional fixed income manager.
With regards to China’s impending slowdown, the fixed income chief cautions that investors shouldn’t be primarily worried about the effect on the country itself.
“This looks like a really nice opportunity in the second half of the year to be layering in long 10 year Chinese bonds into your portfolio,” recommended Briscoe, adding that long bonds have recently suffered a liquidity squeeze-induced sell-off.
Tight liquidity and an ongoing regulatory clampdown has pushed China’s 10-year bonds to now yield less than its 5-year bonds, in a state of affairs known as yield curve inversion.
It is the first time ever this phenomenon has occurred at these specific maturities and signals that a slowdown for the Chinese economy is coming, according to Hayden Briscoe, Head of Fixed Income APAC at UBS Asset Management, speaking on CNBC’s Squawk Box on Monday.

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