V-shaped recovery experienced by CNH bonds in 1H2015

They're likely to perform resiliently in 2015.

It has been noted that CNH bonds had a V-shaped recovery in 1H2015 and the lagging primary market finally started to catch up in June.

According to a research note from HSBC Global Research, further, high-yield new issues are back amid positive
sentiment.

Given what is happening in Europe and the monetary stance of the PBoC, HSBC Global Research thinks CNH bonds are likely to put in a resilient performance for 2015 although there will still be short-term problems.

Here's more from HSBC Global Research:

In fact, we raise our total return forecast (in RMB) for CNH bonds to 4.5%-5.5% in FY2015 from 3.2%-3.7%.

But we still need to prepare for near-term risks, of which volatility is a key one. Externally, the fragile risk appetite and investor caution caused by uncertainty surrounding Greece and the eurozone is likely to curtail EM assets.

Inside China, easy monetary policy is what we are counting on. However, heightened intraday volatility of A-shares has negative implications for offshore funding and credit spreads.