Reforming Asian giants back on investors' radar

[SINGAPORE] Reports on the demise of Asia's two giants China and India are looking somewhat exaggerated. The expectation of structural reform in both countries is causing investor confidence to return.

Some research houses and funds are calling China stocks and bonds value plays, when earlier this year they warned of a financial crisis. China's Big Four banks are now up 15 per cent from March lows. The price of an investment-grade US$800 million bond due 2018 issued by China's largest property developer, China Vanke, is near a one-year high.

Anecdotally, private banks are busy catering to demand for high-yielding Chinese debt, from vanilla bonds issued by China property companies to structured products betting that China banks will not go bankrupt despite fuelling the country's debt binge.