Sourcing Convexity in Asian Markets

Andrew Wong

This chapter will describe a specialist approach to sourcing convexity with a distinct and unique focus. Unlike most strategies that often choose to specialise in a particular asset class (eg, equity) or even instrument type (eg, convertible bonds), this approach is defined by its focus on highly efficient convex profiles across asset classes but with a geographic focus on the Asia–Pacific region. This is an area which spans an extremely diverse set of political systems, economies and markets. Not only has it become an increasingly important zone of global growth and transformation, but from trade flows to capital flows and financial system interconnectivity, the region has become a significant driver of the global economy. From Japan in the North to Australia and New Zealand in the South, and spanning China, Korea, Taiwan, India, Indonesia, Malaysia, Singapore, Thailand, the Philippines and many others countries, the Asia–Pacific region covers a very diverse range of idiosyncratic market structures and dynamics.

However, in spite of all this diversity, countries in the region share two fundamentally important features that have driven their spectacular post-war economic growth