(New York)

Investors in India have by in large part stayed away from their own high yield corporate bonds, but wary investors from China have done the opposite. India’s high yield bond issuers set a $9 billion-dollar record from international investors which tripled last year’s inflows. Many of these investors are coming from China, specifically Evergrande, whose liabilities alone double India’s entire corporate debt market. Many investors are worried that other sectors in China’s economy may come to suffer from Xi Jinping’s ‘common prosperity’. In the meantime, there are still risks to India’s debt, most notably energy prices, as India imports most of its energy. Higher energy prices increase input costs, which could cut margins.

FINSUM: Developing countries outside China are all receiving inflows in corporate and non-corporate debt investments with China’s turmoil.