China Bond Bulls Focus on Stimulus Outlook Amid Default Drumbeat

Defaults and debt rating cuts aren’t putting off bulls on China’s dollar bonds.

Kaisa Group Holdings Ltd. became China’s first builder to renege on U.S. currency notes last week and Moody’s Investors Service cut Glorious Property Holdings Ltd.’s rating to Ca, one step from a grade typically signaling default. Yet Nomura Holdings Inc. sees state support for cash-strapped firms making the nation’s dollar securities Asia’s best gainers. Aberdeen Asset Management Plc says capital controls make China most able to withstand any U.S. Federal Reserve rate increases.