China's rocky real estate market has caused investors to find more stable ground in India and other Asian markets, reported Bloomberg. Corporations in the beleaguered real estate sector in China have been at risk of default due to the cascading effects of the Evergrande crisis.

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But while the government has introduced several policy changes like easing restrictions and introducing monetary stimulus, several analysts still expect defaults.

As a result, investors are exiting the market and stowing it into corporate bonds in other countries. According to data from the Bank of New York Mellon Corporation, South Korea, Indonesia, Singapore, India, Malaysia and Japan saw an increase in the inflow of capital into corporate debts in the past three months. But at the same time, China has experienced outflows.

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"We quite like the India space because there is a lot of ESG bond supply coming from those companies and they aren't quite expensive compared with other Asian peers," Paula Chan, a senior portfolio manager at Manulife Investment Management (Hong Kong) Ltd, told Bloomberg.

"Investors have been hiding in Indian investment-grade and high-yield credit, and other parts of Asia outside of China, as a means to reduce their exposure to China property," said Wai Mei Leong, a portfolio manager at Eastspring Investments, told Bloomberg.

But the broader Asian market may still not be safe if fiscal defaults continue in China. Such defaults can lead to a broader economic slowdown which itself can then affect other regional economies.

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"I'm afraid that this kind of indirect weakening of the Asia credit market will continue for some time," said Jean-Louis Nakamura, chief investment officer for Lombard Odier in the Asia Pacific, to Bloomberg.

Evergrande was the country's second-largest developer in terms of sales in 2020 and is the largest real estate developer in the country in terms of issuance of offshore debt. The company's USD-dominated debt stood at $19 billion in 2021. But the total debt obligations have swelled much past that. The developer had a total of $300 billion in liabilities as of 2021, reported CNBC.

(Edited by : Jomy Jos Pullokaran)