| Anyone looking for financial bubbles at risk of bursting will be watching the rise of hard currency emerging market corporate bonds. Ten years ago, the asset class hardly existed. Today, at an estimated $2tn, it is bigger than the $1.6tn market in US high yield corporate bonds, familiar to investors for decades.
Investors have been drawn by high yields, offered even by investment-grade EM corporate issuers. But with high returns come high risks, and not only those related to repayment. EM corporate bonds are often dangerously illiquid, making them hard to get rid of in a crisis and meaning their prices can change rapidly when the mood of the market turns.........................................Full Article: Source
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