Higher-rated junk bonds in Asian countries where infrastructure spending is fueling growth, such as Indonesia, should offer the best returns in 2011, according to Pacific Investment Management Co. (PIMCO).
With Asia's emerging economies forecast to grow quicker than its developed nations, investors may be constructive on a region or country, yet individual credit assessment is crucial, Lian Chia-Liang, head of emerging Asia portfolio management for Pimco, said in an interview with Bloomberg in Singapore. "Ideally we like to invest in markets which reside in a neighborhood of growth."
As the news service notes, Indonesia, Southeast Asia's biggest economy, will expand 6.28% this year, outpacing the 5.35 percent growth in Singapore and 4.3% in South Korea, according to economists' estimates compiled by Bloomberg. President Susilo Bambang Yudhoyono, who targets 6.6% average annual growth through the remainder of his term ending in 2014, has pledged to double infrastructure spending to $140 billion.
