Selling To The Emerging Market Bond Market Also Sounded The Alarm.

Washington think tank International Finance Association (IIF) released a report that in 2015, the world

The withdrawal of US $735 billion from emerging markets is at least the worst capital outflow in 15 years, about 7 times that of 2014.

IIF expects investors to withdraw $348 billion from developing countries this year.

Stressed bonds refers to bonds that differ from US Treasury bonds at 700-999 basis points.

Distressed bonds refers to bonds with a difference of 1000 basis points above the yield of US Treasury bonds.

Both are junk debts.

In recent months, the issuance of us high-yield non-performing bonds has risen sharply.

The opposite is true.

Recently, the issuance of bad debt in emerging markets has declined, which means that the liquidity of emerging markets is getting worse and worse, and the possibility of bond selling from the sell-off to the crash is increasing.

The bond turnover rate, which measures the ratio of bond pactions to unliquidated balances, has decreased from 1.5 in 2008 to 0.5 at the end of 2015.

At present, emerging market bonds have not collapsed, and investors continue to invest in sovereign and corporate bonds. The reason is that the interest rate due this year is not high, about $32 billion 600 million.

But because of the low scale of cash buffers, the defense of this fort is very fragile.

When the investor redemption increases, the fund clears its position.

According to EPFR, the cash flow of current emerging market bond funds accounts for about 3% of total management assets, less than half that before the financial crisis.

Wall Street News reported on January 19th, emerging market

Refresh its five year high.

The average borrowing cost of emerging market governments has increased from 5.3% in the same period last year to 6.7% in the financial times, according to the Morgan chase index.

The risk premium of emerging market bonds and US bond yields has broken the level of "panic reduction" and "European debt crisis".

JP Morgan tracking data show that investors are willing to hold emerging market debt and holding the premium of the United States to continue to expand 9 basis points to 481.

According to Wall Street, in December last year, US junk debt opened a new round of selling speculation, reflecting investors' concerns about the situation of high-risk companies.

But with the collapse of oil prices since the second half of last year, the financing environment of energy companies has been on the decline, leading to the fall of the junk bond market in the United States.

The sell-off in the US high-yield bond market has also raised alarm bells for the emerging market bond market.

According to the International Monetary Fund (IMF), the size of corporate bonds in emerging markets increased by more than three times between 2004 and 2014.

Last year, investors began to withdraw funds from the market. There were signs that the scale of lending began to expand unsteadily before the Fed raised interest rates, which made investors nervous.