Inflation Linked Bonds Are The Hit In Asia

The head of Fidelity’s institutional business in Hong Kong, Carlo Venes, said that international inflation-linked bonds are becoming more sought after by professional investors in Asia. They want to protect themselves against inflation and to balance their portfolios with non-dollar based investments.

Some analysts predict that Western central banks are following monetary policies which are too risky. Other analysts predict that deflation will follow the International financial crisis.

Verns explained that “The dispersion of views on inflation is huge.” “You have the camp that believes still that the western world will be in a Japan scenario for a decade. You also have the view that with all the printing of money, and all the central bank support, there is risk that, all the money that now sits on corporate balance sheets in cash, will accelerate the risk of inflation picking up.”

China’s inflation went up to a 25-month high of 5.1% in last November.