Key highlights from Ross, PM for UBS Asian High Yield Fund:
- Trade war may change investor sentiment towards the RMB at the margin
- However, the change will not be too drastic
- China is not gearing up to devalue the yuan too aggressively
- Investors are increasingly interested in the RMB as it is “massively under-invested in a global context” due to capital controls
- However the Chinese market is liberalizing and this supports the increasing interest in RMB
- Ross says there’s been “lots of steps to open up channels that allow people to do that, but its just the size of market and opportunity argument”
Pan Asian fixed income
UBS Asian High Yield
You've got a huge huge onshore market and a vast pool of international money sitting in other markets, and you're just rebalancing, to some extent, some of those flows.
Ross on why trade war will not impact RMB significantly
Perspectives matter. Tune in to our insights.
Read Ross’s chat with Citywire
RMB still on central banks' radar
Citywire Asia also discussed our findings on over 30 central banks and sovereign institutions attitude towards the RMB. This was part of the 25th UBS Reserve Management Seminar survey.
The key findings with regards to the RMB are:
- Over the next 25 years, one-third of those surveyed expects the RMB to become a leading reserve currency (on par with the Dollar and Euro)
- The RMB could take up 10% in global FX reserves from 2022 to 2030 according to the survey
- 62% of participants expect their allocation to the RMB to increase and no institution indicated that their allocation will drop. This is unlike the response for the Dollar, Euro, Yen and Pound.
Benno Klingenberg-Timm, Head of Global Sovereign Markets APAC spoke with the Sovereign Wealth Fund Institute (SWFI) on climate change and how sovereign wealth funds should invest through and beyond disruption. More
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