In its latest report, Allianz Investment points out that the performance of Asian fixed income in the first half of 2024 has been outstanding, significantly outperforming the global market. The analysis believes that Asia is entering a multi-year positive cycle, benefiting from strong economic fundamentals, reform-oriented government policies, a high-quality infrastructure ecosystem, and favorable demographic trends. These factors are expected to help Asia seize new growth opportunities, attract significant capital inflows, reduce exchange rate fluctuations, and drive the repricing of local bonds and credits. Looking ahead to the second half of the year, it is expected that Asian fixed income will continue to demonstrate resilience. Allianz Investment recommends focusing on three key themes in the second half of the year: The first theme is the stability of Asian politics and the continuity of policies. Compared to other regions, Asia has smoothly passed through the election period in the first half of the year with limited political volatility. The yield on Chinese government bonds is entering a consolidation phase after a strong bull market since the beginning of the year, with limited upside potential in yields. India is maintaining stable economic growth, declining inflation, and prudent fiscal policies, with the 2025 budget continuing to focus on fiscal consolidation. Political turmoil in Thailand or uncertainties in fiscal implementation and policy formulation may continue to constrain fiscal and monetary policies, leading to asset performance fluctuations and low returns until the leverage ratio stabilizes as an offshore debt rating benchmark. The second theme is the improvement in the credit cycle and continued decline in default rates. Profit reports from Asian companies and financial institutions confirm that Asian credit is at its cyclical peak, with strong fundamentals, stable leverage, and ample liquidity. It is expected that credit trends will remain stable, and default rates will fall to single digits. The third theme is to seize spread opportunities while focusing on risk management. In the second half of 2024, in addition to seizing spread opportunities, there are still opportunities for market misalignment and excess returns in the Asian credit market, especially in high-yield sectors. With risk appetite increasing, market complacency rising after a strong rebound in the first half of the year, investors should continue to focus on risk management. The best spread opportunities exist in industries and companies at the cyclical peak of the credit cycle, such as Indian infrastructure, Chinese utilities, Macau gaming, and some bank capital securities, due to their stable or improving credit records, low default rates, and reasonable total returns.