Rothschild's trust eyes Indonesian bonds
Rothschild's trust eyes Indonesian bonds
SINGAPORE (AFP): The Rothschild group, which launched its
Asian bond trust in Singapore yesterday, is targeting Indonesia
and the Philippines as preferred markets for investments,
officials said.
The factors are the Philippines' positive credit outlook and
its proposed corporate tax reforms, while Indonesia is one of the
"most progressive countries in the region", said Julia Ho, senior
fixed income and currency fund manager of Rothschild Assest
Management (Singapore) Ltd.
"I am very optimistic about the credit outlook there (in the
Philippines), " Ho said at a news conference after the launch of
Rothschild's first open-ended unit trust to invest in Asian
bonds.
Manila's tax reforms would provide a "very good source of
recurring income" for the government and improve the savings-
investment gap which had been a cause of worry in the past, Ho
said.
Ho also said Indonesia was one of the better performing
markets but "still the yields there are very high, very
attractive" mainly because investors are assigning too high a
risk premium due to political risks.
"Indonesia has come a long way. It is one of the most
progressive countries in the region with the deregulation of the
economy" and the growing middle-class, she said.
Generally, the Asian bond markets are relatively under
researched, but they offer higher yields than other international
bonds, Ho said.
She added "so far the bonds haven't been given an investment
grade by rating agencies because the track records of the
companies have been very short."
"Rating agencies tend to be conservative, but as the
fundamentals of companies operating in Asia improve, these will
become investment grade in the future."
Under the Singapore-dollar denominated Five Arrows Asian Bond
Trust fund launched Wednesday, the trust will invest mainly in
Asian bonds issued by the governments and corporations. The trust
is managed by Rothschild Asset Management (S) Ltd.
Minimum initial investment for the trust is S$5,000 (US$3,570)
and subsequent investments will be in multiples of S$1,000. The
launch price is set at S$1.00 per unit and the offer will close
on Dec 20.
The trust is denominated in Singapore dollars and non-
Singapore dollar currency exposure will be limited to under 30
percent of the portfolio.