Nomura Holdings Inc. is recommending dollar-denominated bonds of five Chinese developers for 2013 as a recovery in sales boosts cash flow, contrasting with Morgan Stanley that has twice cut its outlook on the debt since August.
Investors should buy bullish options on Taiwan’s benchmark stock index because it will extend gains as Chinese trade and tourism increase and rising technology sales boost corporate profits, Morgan Stanley said.
Investors should sell speculative- grade debt of government-backed Asian companies and buy property or commodity bonds as economic growth in the region justifies more risk-taking, according to Morgan Stanley.
Foreign currency bonds issued by Chinese property companies may receive a “terrific boost” after China signaled the end of a two-year currency peg to the dollar, reducing the chance of higher borrowing costs, Morgan Stanley said.
Companies in the Asia-Pacific region slowed dollar bond sales to the least in five weeks amid economic data from China that may encourage policy makers to boost stimulus measures. Bond risk fell in Asia.