China / HK Blue-Chip IG

A-/A3+ China and Hong Kong issuers with large benchmark issues.

The current environment for China and Hong Kong bluechip investmentgrade credit presents a compelling entry point for investors seeking to capture elevated yields from highquality issuers. As market volatility persists, the yieldtoworst on benchmark issues from statebacked financial institutions and dominant technology conglomerates has widened significantly, offering a rare opportunity to lock in returns exceeding 6.5% across the curve. These securities provide a defensive anchor, combining robust credit profiles—typically rated A to A+—with the liquidity benefits of largescale benchmark issuance. Relative value is particularly pronounced in the longdated segment of the tech sector, where issuers such as Tencent and Alibaba are trading at substantial discounts to par. For instance, the Alibaba 4.2% 2047 and the Tencent 5.6% 2046 notes currently offer yields of 6.51% and 6.58%, respectively, reflecting a market repricing that arguably overshoots the underlying credit fundamentals of these cashgenerative firms. Simultaneously, shorterduration financial paper, such as the ICBCIL 2.25% 2026, provides a tactical yield of 7.14%, appealing to investors looking to mitigate duration risk while maintaining exposure to systemic Chinese financial entities.