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From Christine Gaylican, Opalesque Asia:

Some fund managers have turned to government treasuries and local currency bonds in Asia to shore up liquidity problems in the medium term.

Dromeus Capital Group's managing partner Jason Manolopoulos said in a statement received by Opalesque that the prevailing pump priming activities of China and the rise in the issuance and purchase of government-issued treasuries in East Asia excluding Japan have provided local economies the needed liquidity in the past few months.

Manolopoulos further said China's state-owned banks had unleashed an estimated $670 billion earlier this year and the global economy benefited from it.

"The global economy has been filling up its tank in China and hoping another pit-stop would not be needed until other countries find their footing again," he noted.

He added: "The other engine of global recovery seems to be global liquidity levels."

He noted that the market's appetite for bonds such as the one-year Eurobonds at 1% in June has been recycled mostly in bond buybacks and other securities transactions.

"Hopefully, central banks have realised the valuable lessons for the credit crisis, that beyond a certain point they cannot remain indifferent about the levels of asset prices," he said.

Ray Prasad, portfolio manager for emerging markets of Hong Kong-based investment firm Batterymarch, said in an earlier interview with ......................

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