Investors reminded to do homework before buying high-yield bonds
But market participants think a lack of credit rating does not necessarily spell trouble
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Singapore
THE strong demand from Singapore retail investors for high-yield instruments has raised concerns about whether they should be rated and how risky those instruments actually are. Recent news of defaults in the Singapore bond market have not helped, some note. Others, however, stress that bonds are traditionally considered less risky than equities and that investors ought to do their homework before investing as they would with any other instrument.
"We recommend our clients to focus on high quality issuers and where the issue size would not hinder secondary trading," said Neel Gopalakrishnan, director and emerging markets bond analyst at Credit Suisse Private Banking Asia Pacific.
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