While borrowers continue to suffer from the rates hike from the beginning of the year, with the rising inflationary concerns, investment-grade and the government bonds market has not faired well either.
Across the financial products spectrum, bonds have always been the stable and safer option for investors across the globe, typically, when there are high volatilities in the equities market, investors have a higher tendency to switch gear into bonds which offer a stable return.
Nevertheless, with the continuous rates hike expected across the globe, participating in the public capital markets becomes difficult from both a the borrower and investor standpoint.
The private credit market may offer a new channel for market participants to explore. With a good number of real estate high-yield developers going into either liquidity or credit crisis, it gives another boost or reason for regional participants to take a closer look into the private credit space.
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Under pressure from central bankers determined to quash inflation even at the cost of a recession, global bonds slumped into their first bear market in a generation. The Bloomberg Global Aggregate Total Return Index of government and investment-grade corporate bonds has fallen more than 20% from its 2021 peak on an unhedged basis, the biggest drawdown since its inception in 1990.
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