Asian Fixed Income Outlook - LarrainVial · Source: IMF World Economic Outlook, Bloomberg, July 2015. Any forecast, projection or target contained in this presentation is for information

For Professional Investors only. Not for further distribution.

For professional clients only. Not for further distribution.

February 2016

Rare value in an uncertain world

Asian fixed income

INTERNAL

2



Content

INTERNAL

Asian fixed income returns in context

Macro situation in Asia

Market overview

Key considerations in Asian fixed income

3



Asian fixed income returns in context

Source: BoA Indices: US Treasury, US Corporates, US High Yield, Euro Govts, Euro Corporates, Euro High Yield; JPMorgan Asia Credit Corporate Index: Asian Corporates, Asian High Yield; HSBC Asian Local Bond Index: Asian

Local Currency Bonds, offshore RMB bonds; ChinaBond indices: onshore RMB bonds. Data as of 22 February 2016

Data shown is for illustrative purposes only and does not constitute to investment recommendation to buy or sell in the above-mentioned asset classes

INTERNAL

2014 2015 2016 (to 22 Feb) Yield

US Treasury 6.0% 0.8% 2.2% 1.7%

US Corporates 7.5% -0.6% 0.4% 3.6%

US High Yield 2.5% -4.6% -1.6% 9.4%

Euro Govts 13.2% 1.6% 2.0% 0.5%

Euro Corporates 8.3% -0.4% 0.6% 1.3%

Euro High Yield 5.5% 0.8% -1.1% 5.7%

Asian Corporates 8.0% 2.8% 0.9% 5.2%

Asian High Yield 6.1% 5.2% -0.4% 8.3%

Asian Local Currency Bonds (in USD) 4.4% -3.2% 1.2% 3.7%

Offshore RMB Bonds (in USD) 0.4% -2.3% -1.4% 5.6%

Onshore RMB Bonds (in USD) 7.6% 3.5% 0.0% 3.2%

Indian bonds (in USD) 13.9% 3.4% -3.2% 8.1%



Macro situation in Asia

INTERNAL

5



Asia is in a better position to withstand capital outflows

INTERNAL

Foreign holding of local government bonds is relatively high

in Indonesia and Malaysia

Basic balance (current account balance + net FDI inflows) has

improved or remained in surplus in most countries

Signs of stabilising FX reserves (ex China) as central banks

scaled back FX intervention

Source: CEIC, HSBC Global Asset Management, data as of January 2016

Asia will likely continue to see increased capital-flow

volatility on the back of a Fed rate hiking cycle and FX

volatility/RMB risks

Improved basic balance provide some buffers against the

risk of capital outflows

However, countries with heavy reliance on foreign funding

and low FX reserves buffers could be more vulnerable

0

10

20

30

40

50

60

01-2007 01-2008 01-2009 01-2010 01-2011 01-2012 01-2013 01-2014 01-2015

KR TH MY (MGS and MTBs) MY (MGS, MTBs & GIIs) ID

USDbn USDtrn

% of GDP (4qtr-avg) %

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

50

100

150

200

250

300

350

400

450

01-2003 01-2006 01-2009 01-2012 01-2015

HK IN ID KR MY

PH SG TW TH CN, rhs

-5

0

5

10

15

20

1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15

CH IN ID KR MY PH TW TH

Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15

6



-15

-10

-5

0

5

10

15

CN HK IN ID KR MY PH TW TH VN

1994 1995 1996 2012 2013 2014

0

5

10

15

20

25

CN IN ID KR MY PH SG TW TH

1995 1996 1997 2012 2013 2014 2015*

External fundamentals generally healthy

Note:

1. January-July average for 2015

Source: CEIC, HSBC Global Asset Management, data as of September 2015

INTERNAL

Most countries now run current account surpluses vs mostly

in deficits prior to the Asian financial crisis (AFC) FX reserves import cover improved from their AFC levels

% of GDP Months

1

7



For all the concerns about Chinese growth, China and India seem to have more solid foundations than other large economies

Note:

1. Countries included are those that are included in the GBI-EM Broad Index as of 31 October 2014

Source: JP Morgan Morgan Markets, IMF, World Economic Outlook Database October 2014. Table Bloomberg 11.1.16

BRICS et al GDP 2015 GDP 2016 Unemployment CPI

Budget

balance C/A balance 10 yr bonds 12mo USD

Brazil -2.8% -1.2% 7.6% 8.9% -6.0% -3.8% 16.2% -34.6%

Russia -3.9% -0.4% 5.2% 15.0% -2.8% 5.5% 9.6% -17.9%

India 7.3% 7.6% 4.9% 5.0% -3.8% -1.1% 7.7% -6.7%

China 6.9% 6.4% 4.1% 1.6% -2.7% 3.1% 2.8% -5.6%

South Africa 1.5% 1.8% 25.5% 4.7% -3.8% -4.3% 9.5% -31.2%

Malaysia 5.4% 6.1% 3.2% 2.5% -4.0% 2.5% 4.2% -19.1%

Indonesia 4.7% 5.0% 6.2% 6.4% -2.0% -2.5% 8.7% -9.7%

Turkey 2.9% 3.0% 9.8% 7.5% -1.6% -4.9% 10.9% -24.3%

INTERNAL

8



Asian currencies have been appreciating against global currencies

80

85

90

95

100

105

110

115

120

12-2013

01-2014

02-2014

03-2014

04-2014

05-2014

06-2014

07-2014

08-2014

09-2014

10-2014

11-2014

12-2014

01-2015

02-2015

03-2015

04-2015

05-2015

06-2015

07-2015

08-2015

09-2015

10-2015

11-2015

China Taiwan Hong Kong India Indonesia Korea Malaysia Philippines Singapore Thailand United States

Source: BIS, HSBC Global Asset Management, data as of December 2015

INTERNAL

Asian currencies in REER terms (rebased to 100 on 31 Dec 2013)

9



RMB expected to remain stable against trade weighted index

USD/CNY (26%)

EUR/CNY (21%)

JPY/CNY (15%)

HKD/CNY (7%)

AUD/CNY (6%)

CNY/MYR (5%)

CNY/RUB (4%)

GBP/CNY (4%)

SGD/CNY (4%)

CNY/THB (3%)

CAD/CNY (3%)

CHF/CNY (2%)

NZD/CNY (1%)

INTERNAL

RMB strengthens versus EM currencies Currency weighting in TWI

China has pledged to monitor newly adopted Trade Weighted Index (TWI) as reference for daily currency fixing rate

USD/CNY could see greater volatility, while the RMB against TWI is expected to remain relatively stable

Rebased, Aug 2015 = 100

85

90

95

100

105

110

115

Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16

vs USD vs EUR

vs JPY CNY (CFETS weightings)

vs a basket of EM currencies

Appreciation

Depreciation



Market overview

INTERNAL

11



Overview of Asian fixed income Size and yields of the Asian credit and currency bond markets

Notes:

1. Source: JPMorgan Asia Credit Index, as of 31 December 2015.

2. Source: AsiaBondsOnline; market sizes as of September 2015; Yield numbers as of 27 January 2016

Data shown is for illustrative purposes only and does not constitute any investment recommendation to buy or sell in the above-mentioned countries and asset classes.

0

1

2

3

4

5

6

7

8

9

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Chin

a

Ko

rea

India

Ma

laysia

Th

aila

nd

Sin

ga

pore

Hong K

on

g

Indonesia

Ph

ilippin

es

% (USDbn)

Size of Asian local currency bond market (LHS) 10-year Government Yields (RHS)

INTERNAL - For Professional Investors only. Not for further distribution.

Asian USD credit markets1 Asian local currency bond markets2

The market can be broadly split in two

USD Asian credit market of approx USD623 billion

Local currency bond market of approx USD10 trillion

Including China, South Korea, India, Hong Kong, Thailand, Malaysia, Singapore, Indonesia, Philippines and some other frontier

markets

0

1

2

3

4

5

6

7

8

0

50

100

150

200

250

300

Chin

a

Ko

rea

Hong K

on

g

Indonesia

India

Ph

ilippin

es

Sin

ga

pore

Ma

laysia

Th

aila

nd

Sri L

anka

Pa

kis

tan

(%) (USDbn)

Size of Asian USD credit market (LHS) Yield (RHS)




INTERNAL

13




INTERNAL

Quality

Price

Underrepresentation

Diversification

Future developments

Resilience

Capturing the theme

Single market opportunities

14



Quality

Source: IMF World Economic Outlook, Bloomberg, July 2015. Any forecast, projection or target contained in this presentation is for information purpose only and is not guaranteed in any way. HSBC accepts no liability for any failure to

meet such forecasts, projections or targets. For illustrative purpose only

0

1

2

3

4

5

6

Asia ex-Japan North America Latin America European Union

2014 2015e 2016e 2017e

INTERNAL

Government debt to GDP Asian GDP growth vs rest of the World

0

50

100

150

200

250

300

Jap

an

Italy

US

Sin

ga

pore

Sp

ain

Fra

nce

UK

Germ

any

India

Ma

laysia

Th

aila

nd

Chin

a

Ta

iwan

Ko

rea

Ph

ilippin

es

Indonesia

Hong K

on

g

Asia (ex-Japan) Non-Asia

% %

Asian (ex Japan) institutions are less indebted than those in other parts of the world

Participating in generally higher growth economies should enable Asian institutions to service their debts more easily, all other

things being equal

15



0

1

2

3

4

5

6

7

8

9

Indo

nesia

India

Ph

ilipp

ines

Ma

laysia

Chin

a

Th

aila

nd

Sin

ga

pore

Ko

rea

US

UK

Sp

ain

Hon

g K

on

g

Italy

Fra

nce

Ge

rma

ny

Jap

an

Price

Source: Bloomberg, 27 January 2016

INTERNAL

Selected 10-year government bond yields

Spreads Yield (%)

Yields in Asia tend to be higher than in US, Japanese and European markets

Global investment grade bond spread

0

50

100

150

200

250

300

Dec-1

3

Jan

-14

Fe

b-1

4

Ma

r-14

Ap

r-14

Ma

y-1

4

Jun

-14

Jul-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan

-15

Fe

b-1

5

Ma

r-15

Ap

r-15

Ma

y-1

5

Jun

-15

Jul-1

5

Au

g-1

5

Se

p-1

5

Oct-

15

Nov-1

5

Dec-1

5

US IG Corp Asia IG Corp EU IG Corp

16



Asia is underrepresented in Global Bond Indices

Rest of the World Asia

Note:

1. Citigroup World Government Bond Index

Source: IMF, Citigroup, data as of October 2015

Asia accounts for about 50% of the

world’s population

INTERNAL

Asia accounts for about 35% of the

world’s GDP

Asia accounts for less than 1% of

Global Bond Indices1

17



Diversification

Note:

1. The effects of taxes have not been adjusted in this analysis

Source: Bloomberg, June 2015

Index 1 = 10% HSBC ALBI + 10% HSBC ADBI + 80% BGA

Index 2 = 15% HSBC ALBI + 15% HSBC ADBI + 70% BGA

Risk and

return 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

H1

2015

Cum

return

10-year

average Volatity

Index 1 -3.5% 7.0% 9.1% 3.8% 8.1% 6.3% 5.6% 5.2% -2.8% 1.5% -2.5% 43.6% 4.0% 4.7%

Index 2 -2.9% 7.3% 8.9% 3.2% 8.7% 6.7% 5.6% 5.7% -2.9% 2.0% -2.2% 46.9% 4.2% 4.5%

BGA -4.5% 6.6% 9.5% 4.8% 6.9% 5.5% 5.6% 4.3% -2.6% 0.6% -3.1% 38.0% 3.7% 5.3%

INTERNAL

Cumulative return (in USD)¹

18



Return characteristics of bond markets Stress scenarios

Asset class Duration Yield

Current

quality

Simulated

return if +1%

govt yields

Simulated

return if +2%

govt yields

Simulated

return if 100bp

spread widening

Simulated

return if 200bp

spread widening

US Treasury 6.24 1.53% AA+ -2.66% -7.90% 2.58% 2.58%

Euro Government 7.16 0.65% AA+ -4.89% -11.05% 1.27% 1.27%

US Corporate 6.71 3.59% BBB -0.98% -6.69% -0.98% -6.69%

Euro Corporate 4.94 1.45% BBB -2.10% -6.04% -2.10% -6.04%

Onshore RMB Bond 3.83 3.10% BBB+ 0.84% -1.99% 3.10% 2.53%

Offshore RMB Bond 2.58 5.32% A-1 3.74% 2.16% 4.06% 2.79%

Asia Corporate (USD) 4.07 4.47% BBB 2.01% -1.06% 2.01% -1.06%

India Government 6.02 7.55%2 BBB- 2.53% -2.49% 7.55% 7.55%

Notes: Any forecast, projection or target contained in this presentation is for information purposes only and is not guaranteed in any way. HSBC accepts no liability for any failure to meet such forecasts, projections or targets. For

illustrative purpose only. Simulations are not indicative of future performance. Actual events, conditions and performance may differ materially from assumptions and simulations

1. Based on HSBC Global Asset Management Internal Ratings where bonds are unrated by major rating agencies

2. Including estimate for withholding tax on coupons for foreign investors

3. For illustrative purpose only and does not constitute investment advice

Source: Bloomberg; HSBC Global Asset Management, 19 January 2015

INTERNAL

Simulated scenario returns (in local currency) over next 12 months

19



Future developments

Source: HSBC Global Asset Management, July 2015. Forecasts in the first table are based on 5 year historical growth rate and IMF forecast for nominal GDP growth, assuming broadly stable exchange rates. ‘China 2014 Investable’

based on sum of QFII and RQFII quotas available for bond investment and an estimate of CIBM quotas for Central Banks and Insurance (not publically available). ‘India 2014 Investible’ based on FPI domestic bond market quota.

Current market sizes taken from Asian Development Bank except India taken from HSBC research. Forecasts in the second table are based on JPMorgan Asian Credit Index and 5 year historical growth rates and IMF forecast for

nominal GDP growth, except China. Smaller countries excluded. The forecasts are provided for illustrative purpose only and are not guaranteed in any way. HSBC accepts no liability for any failure to meet such forecasts

USDbn 2014

2014

investable 2020f

% change 2014

investable to 2020f

China 5,192 250 10,100 3,940%

Indonesia 123 123 172 39%

Korea 1,703 1,703 2,802 65%

Malaysia 316 316 573 82%

Philippines 104 104 190 83%

Hong Kong 194 194 310 60%

Singapore 241 241 386 60%

Thailand 281 281 444 58%

Vietnam 41 41 122 199%

India 1,086 81 2,112 2,508%

Total 9,281 3,334 17,211 416%

USDbn 2014 2020f % change

China 195.8 381.0 95%

Hong Kong 69.5 145.2 109%

India 49.5 219.8 344%

Indonesia 55.4 118.0 113%

Malaysia 17.6 25.1 43%

Pakistan 3.6 12.6 246%

Philippines 42.0 70.7 68%

Singapore 24.7 32.5 31%

South Korea 78.3 118.1 51%

Sri Lanka 7.1 45.6 545%

Taiwan 2.9 8.8 201%

Thailand 15.6 65.7 322%

Vietnam 2.4 8.2 247%

Total 564.5 1,251.2 122%

INTERNAL

Forecast of local currency bond market size using GDP

forecast and historical 5-yr avg growth rate

Forecast of USD Asian bond market size using GDP forecast

and historical 5-yr avg growth rate

20



Capturing the theme

INTERNAL

Asian fixed income universe is made up of the countries which are set to contribute to the shift of focus in the world economy from

west to east

The financial markets will provide new and valuable opportunities for investors in the coming years

21



Core yields in China are high compared to international markets

Source: Bloomberg, HSBC, data as of 14 January 2016

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

China(onshore)

China(offshore)

Italy Spain UK US Belgium France Holland0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Belgium China(onshore)

China(offshore)

Chile CzechRepublic

Japan SouthKorea

Taiwan


10 year government bond yields of world’s largest

bond markets

10 year government bond yields of selected markets which

are rated AA- or Aa3

Compared to the 10 year bonds in the top 10 largest bond markets, China’s is highest

Amongst peers with same credit rating (AA- or Aa3), China’s yield is high

Yield (%) Yield (%)

22



Limited ratings and pricing differentiation in the onshore RMB credit market

Note:

1. The rating mentioned above refers to the local credit rating in China. The rating criteria and methodology used by Chinese local rating agencies may be different from those adapted by most of the established international credit

rating agencies. Therefore, the Chinese local credit rating system may not provide an equivalent standard for comparison with securities rated by international credit rating agencies

Source: ChinaBond, LHS credit quality breakdown as of 31 December 2015, RHS spreads as of 13 January 2016

0

50

100

150

200

250

300

Ma

y-1

4

Jun

-14

Jul-1

4

Au

g-1

4

Se

p-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan

-15

Fe

b-1

5

Ma

r-15

Ap

r-15

Ma

y-1

5

Jun

-15

Jul-1

5

Au

g-1

5

Se

p-1

5

Oct-

15

Nov-1

5

Dec-1

5

3Y AA Corporate Bond Yields - 3Y AAA Corporate Bond Yields

Spreads between low and high

quality bonds start to widen as

credit event cases increase

AAA (61.9%)

AA+ (19.0%)

AA (17.9%)

AA- (1.0%)

A+ (0.2%)

A & Below (0.1%)

Over 98% of the market is rated AA or above by local credit agencies, less than 2% is rated AA- or below

Published credit ratings are not useful for differentiating between different quality bonds

An increasing number of credit default events should continue to drive improved pricing differentiation in the market


Onshore corporate bond spreads Credit quality breakdown1

23



Mapping local credit ratings to international equivalents (Unofficial mapping for reference only)

Note:

1. The table is provided for discussion purposes only. There is no official mapping to convert local rating into international rating. The rating criteria and methodology used by Chinese local rating agencies may differ from those

adopted by established international credit rating agencies. Therefore, the Chinese local credit rating system may not provide an equivalent standard for comparison with securities rated by international credit rating agencies

Source: HSBC Global Asset Management, December 2015

Local rating International rating (S&P)

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

BB

BB-

B+

B

B-

CCC

A

A

A A

A

+ A

A A

A

- A+ and

below

China onshore bonds are mainly rated by local

rating agencies, which have difference standards to

international ones

Local rating agencies eg China Lianhe Credit

Rating, Dagong Global Credit Rating, Peng Yuan

Credit Rating, etc

If we try to map the local ratings to international one

by using China’s sovereign rating:

– S&P assigned AA- vs Local rating agencies rated AAA to

Chinese government

Reference rating conversion table¹

Sovereign rating


24



Offshore RMB bonds are on average yielding 5.5%, while average duration is only 2.6 years

Bonds denominated in CNH tend to have higher yields, compared to bonds in other major currencies such as USD and EUR, even

when comparing the same issuer with very similar tenor

Offshore RMB bond market often offers higher yields

Same bond in different currencies Yield (%) on 25 Jan 2016

Total 3.75% 09/24/2018 (CNH) 4.95

Total 2.125% 08/10/2018 (USD) 2.18

Total 4.875% 01/28/2019 (EUR) 0.22

Same bond in different currencies Yield (%) on 25 Jan 2016

BPLN 3.95% 10/08/2018 (CNH) 5.50

BPLN 2.241% 09/26/2018 (USD) 2.36

BPLN 2.994% 02/18/2019 (EUR) 0.52

Source: HSBC Global Asset Management; Bloomberg, data as at 25 January 2016. The data presented is for information and illustration purposes only and is not intended as an offer or solicitation for the purchase or sale of any

financial instrument or investment strategy


Company 1: Total (bond issued on 12 Sep 2013)

Company 2: BPLN (bond issued on 2 Oct 2013)

25



Yield comparison – Asian hard currency bond vs offshore RMB bond

Historical yield (duration adjusted)

Yields in the offshore market are attractive on a risk adjusted basis

Source: HSBC Global Asset Management; Bloomberg, data as of 29 December 2015

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15

HSBC Asian US Dollar Bond Index BofA Merrill Lynch Euro Corporate Index BofA Merrill Lynch US Corporate Index HSBC Offshore RMB Bond Index

0.0

0.5

1.0

1.5

2.0

Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15

HSBC Asian US Dollar Bond Index BofA Merrill Lynch Euro Corporate Index BofA Merrill Lynch US Corporate Index HSBC Offshore RMB Bond Index

%


Duration of the market is only around 2.6 years

Therefore the duration-adjusted yield is attractive

26



Indian bonds

5.2 5.5

6.0 5.7

4.3 3.9 4.0

3.3

2.5

6.0 6.5

4.8

5.7

4.8 4.5

4.1 3.9 3.5

3.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

FY

00

FY

01

FY

02

FY

03

FY

04

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

Fiscal deficit (as per new consolidation path) Old fiscal consolidation path

Govt’s fiscal

consolidation path

-6

-5

-4

-3

-2

-1

0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

0123456789

10

So

uth

Afr

ica

Indonesia

India

Me

xic

o

Ph

ilippin

es

Ma

laysia

Hungary

Chin

a

Th

aila

nd

US

UK

Sp

ain

Germ

any

7.8%

Note: Any forecasts, projections or targets contained in this presentation is for information purpose only and is not guaranteed in any way. HSBC accepts no liability for any failure to meet such forecasts, projections or targets. For

illustrative purpose only

Source: Budget documents, CEIC, HSBC, as of 28 January 2016

Expected

INTERNAL

High yield

Improving budget

Oil boost

Improving current account

Improved currency performance

Central government fiscal deficit

Selected 10 year government bond yields Current account deficit

Yield (%)

% of GDP

% of GDP

27



Conclusions

INTERNAL

Asian fixed income has provided decent returns during the latest bout of risk aversion

Asian currencies generally have good fundamentals, but progress of USD is key

Asian fixed income has enduring qualities with the potential to outperform

Interesting niche opportunities are worth consideration



Important Information

INTERNAL

29



Key risks

INTERNAL

Investor should be reminded that investment in some of the developing Asian countries may involve special considerations and

risks. Political changes, government regulation, social instability or diplomatic development, etc could affect adversely the

economies of such countries or the value of the investment

Change of interest rate may affect the value of the investments. Bonds and other fixed income securities are more susceptible to

fluctuation in interest rate and may fall in value if interest rates change

The assets and liabilities of the investments may be denominated in Asian currencies which is different from the base currency of

the investments. Therefore, the investments maybe affected favourably or unfavourably by exchange control regulation or

changes in the exchange rates between the base currency and other currencies

The investments may have exposure in credit risk whereby investments in non-investment grade debt obligations involves a high

amount of risk. An issuer suffering an adverse change in its financial condition could lower the credit quality of a security, leading

to greater price volatility of the security

Investments made may have exposure in financial derivative instruments, such as futures, forwards and swaps, etc. Investments

in financial derivative instruments may involve a greater degree of risk than in case with conventional securities and may subject

to liquidity and counterparty risks

Currency movement and market condition may affect the value of investments

30



Explanatory notes and disclaimers

HSBC Global Asset Management is a group of companies in many countries and territories throughout the world that are engaged in

investment advisory and fund management activities, which are ultimately owned by HSBC Holdings Plc. HSBC Global Asset

Management is the brand name for the asset management business of HSBC Group. HSBC Global Asset Management (USA) Inc. is an

investment advisor registered with the US Securities and Exchange Commission.

Operations by HSBC’s headquarters or other offices of this bank abroad are not subject to audit and Chilean rules are not

covered by warranty of the Chilean state.

Inform yourself about the state guarantee on deposits at your bank or in www.sbif.cl (http://www.sbif.cl)

This material has been prepared or is distributed for informational purposes only and is not a solicitation or an offer to buy or sell any

security or instrument or to participate in any trading or investment strategy. All opinions and assumptions included in this presentation

are based upon current market conditions as of the date of this presentation and are subject to change. All investments involve risk

including the loss of principal.

This information has been prepared for informational purposes only, and is not intended to provide and should not be relied

on for accounting, legal or tax advice. You should consult your tax or legal advisor regarding such matters.

This presentation contains data compiled from third party sources believed to be reliable, but the accuracy of such data has not been

verified.

Forecasts, projections or targets where provided are indicative only and are not guaranteed in any way. HSBC Global Asset

Management accepts no liability for any failure to meet such forecasts, projections or targets.

The views expressed in this material were held at the time of preparation and are subject to change without notice.

US persons (both entities and individuals) are subject to US taxation on their worldwide income and may be subject to tax and other filing

obligations with respect to their US and non-US accounts. The Foreign Account Tax Compliance Act (FATCA) is a US law designed to

prevent the use of non-US accounts or non-US entities to avoid US taxation of income and assets. To meet this objective, FATCA

imposes on US and non-US entities certain documentation, due diligence, withholding and reporting requirements with respect to

accounts and certain payments. Investors should consult their independent tax advisors about tax implications.

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Asian Fixed Income Outlook - LarrainVial · Source: IMF World Economic Outlook, Bloomberg, July 2015. Any forecast, projection or target contained in this presentation is for information