Junk Rally Sparks Sales by Nikko Amid Bubble Risk: China Credit
This article is for subscribers only.
Nikko Asset Management Ltd. and GAM Holding AG are trimming holdings of Chinese dollar-denominated junk bonds amid their strongest rally in almost a year, concerned over a surge in issuance and a possible asset bubble.
Speculative-grade securities in China gained 3 percent in September, the most since November, beating the 1 percent advance for U.S. counterparts, according to Bank of America Merrill Lynch indexes. Nikko and GAM decreased holdings earlier this month, while Morgan Stanley favors investment-grade Hong Kong-based corporates as leverage among Chinese companies soars.