Far East Credit Fund

December 2024 Update & Outlook Emerging and Frontier markets retreated sharply in December. Asian debt issuers fared better than their global counterparts with the region’s AHYG emerging and frontier credit ETF turning in a -0.68% performance as compared to the -2.20% of its EMHY global counterpart.  The VWO emerging and frontier equity ETF’s -1.72% performance demonstrated the pan-asset class nature of the ‘risk-off’ sentiment. Uncertainty over future US rate cut trajectory and trade policy appear to unsettled investors in the aftermath of stateside elections. Continued gains from Sri Lankan positions drove Asia’s outperformance as the country closed out its long-awaited debt exchange. This and improving fundamentals saw Fitch upgrade the sovereign to ‘CCC+’. The move - combined with a similar Moodys upgrade in November and a lack of new sovereign issues – triggered a better-than-expected market response.  Shorter-dated Indonesian, Indian and Mongolian issues across sectors all turned in notable supporting performances. Longer-dated and higher rated issues across sectors and geographies weighed on returns as investors lengthened rate cut expectations. Investor disappointment with a worse-than-expected restructuring of an Indonesian garment manufacturer’s issue also had a negative but immaterial impact on returns. Investors appear to remain comfortable accumulating cash given poor liquidity in short-dated issues and continued rate expectation-driven softness in the long-dated end of the market.  New issues should provide opportunities as the year progresses. Falling all-in yields, tightening local bank liquidity and a growing need for funding in sizes and tenors beyond the capacity of most local markets should see the region’s issuers start to tap offshore debt markets. www.feimhk.com #FrontierMarkets #EmergingMarkets #CreditMarkets #Indonesia #SriLanka #Mongolia #India #CreditRating #Moodys #Fitch

Far East Credit Fund's November Monthly Report emailed out 16-Dec-24. Sender: admin@feimhk.com. November 2024 performance data now uploaded to the Albourne, ALTSMARKETPLACE, HFM - With Hedge and Preqin platforms. For more about us: www.feimhk.com. #FrontierMarkets #EmergingMarkets #CreditMarkets #Indonesia #SriLanka #Cyprus #Mongolia #Turkey #CreditRating #Moodys #StandardandPoors #Fitch

Far East Credit Fund is pleased to announce its performance and key data are now available on ALTS MARKETPLACE - in addition to the Albourne, Prequin and with.Intelligence platforms.

November 2024 Outlook & Update The Emerging and Frontier credit space proved remarkably resilient in November with the AHGY and EMHY Asia regional and global ETF credit ETFs respectively +0.60% and +0.56%. The VWO Emerging and Frontier equity ETF meanwhile returned -4.67% as US post-election protectionist fears rocked the risky asset space.  Credit-intensive positioning did take a disproportionate hit as investors retreated from riskier corners the emerging and frontier space. A worst-case outcome at an Indonesian garment manufacturer flagged in last month’s update weighed on returns. Duration-heavy positioning took an added hit from the lengthening of the US Fed’s expected rate cut glide path. The stellar performance of Sri Lankan sovereign positions offset these impacts. The announcement of better-than-expected debt exchange terms and a quick Moodys upgrade to Caa1 triggered the move.   The lengthening of US rate cut expectations saw several execute duration-shortening trades in November. The short-dated sovereign-guaranteed inaugural issue by Mongolia’s capital city proved a popular choice. Moodys’ November upgrade also put seasoned issues out of the Central Asian country into vogue. We see improving sovereign creditworthiness underpinning emerging and frontier credit markets in 2025. November saw Moodys upgrade Cyprus in addition to Sri Lanka and Mongolia. S&P upgraded Turkey’s rating with Moodys guiding similar upside in 2025. Fitch meanwhile assigned Nepal a first-time rating while upgrading both Argentina and Egypt in November. www.feimhk.com #FrontierMarkets #EmergingMarkets #CreditMarkets #Indonesia #SriLanka #Cyprus #Mongolia #Turkey #Nepal #CreditRating #Moodys #StandardandPoors #Fitch

Far East Credit Fund's October Monthly Report emailed out 15-Nov-24. Sender: nelson.kan@feimhk.com. October 2024 performance data now uploaded to the Albourne, HFM - With Hedge and Preqin platforms. For more about us: www.feimhk.com.

Far East Credit Fund attended The Alternative Investment Club (TIAC)’s BME November 8th Singapore event at the historic Raffles Hotel. Many thanks to TIAC for their invitation and Swiss Financial Services for organizing. www.feimhk.com #SwissFinancialServices #TIAC #RafflesHotel

October 2024 Outlook & Update Emerging markets braced for stateside elections in October with the AHYG Asia regional and global EMHY credit ETFs posting respective -15bp and -93bp returns. The VWO global emerging market equity ETF doubled down with a -258bp return on the month. Sri Lankan sovereign issues delivered most of Asia credit’s upside for a second month. The Central Bank’s announcement that it expected complete the restructure of its hard currency bonds by year-end combined with thin markets in these securities drove the rally. Honourable mention went to Mongolian positions on the back of respective late-September and early-October sovereign upgrades to ‘B+’ by Fitch and S&P. Longer duration positions across sectors played a supporting role on the anticipation of US rate cuts while the remainder of our space drifted lower during the month.   Pandemic aftermath situations dominated the emerging and frontier credit conversation given the dearth of new issuance activity. The Indonesian garment industry grabbed headlines as one sportswear manufacturer’s restructuring tracked toward low-case scenarios and a second conducted mass prayer services to avoid liquidation. Issues of a stressed but performing Hong Kong-based developer and toll-road operator wobbled on weak 3Q24 operating results.  But strong 3Q24 Indonesian property sector results – accentuated by the unexpected late-month call of a ‘CCC-rated’ issuer’s remaining offshore notes - demonstrated China’s property woes are not a regional issue.  S&P’s November 1st upgrade of Turkey to ‘BB-‘ also gave the emerging and frontier credit space a welcome boost. Anticipation that Moodys will join Fitch and S&P in rating the country at the ‘double-B’ tier should drive returns on both its sovereign and bank issues in the coming weeks. We also expect our defaulted Sri Lankan sovereign positions will continue to eke out gains as their long-expected exchange nears. www.feimhk.com

Turkey's return to orthodox monetary has unleashed the country's potential. But a return to typical economic metrics is several quarters away.

Turkey's return to orthodox monetary has unleashed the country's potential. But a return to typical economic metrics is several quarters away.

Turkey's return to orthodox monetary has unleashed the country's potential. But a return to typical economic metrics is several quarters away.