THE first nine months of 2004 represented a prolonged period of uncertainty for regional investors – the US Fed ended four years of loose monetary policy, concerns on a potential hard landing on the Chinese economy, implications of record-high oil prices on the global economy and looming geopolitical risks.
Despite a difficult investment environment, Asian investors were well rewarded as credit spreads on Asian dollar bonds tightened to all-time lows towards end-2004 on the back of solid macroeconomic fundamentals and sovereign rating upgrades. GDP growth in most Asian economies was robust in 2004 given the low base effect of the previous year.