The expert panel addresses current topics of investor interest: David Pinkerton (chief investment officer of Falcon Private Bank) was asked: What should Hongkongers do with their Swiss francs following the central bank's decision to cap its exchange rate to the euro? The Swiss franc historically has been a safe haven, reflecting the fiscally conservative condition of the economy. The currency's recent appreciation, versus the euro and the dollar, to record levels has threatened to structurally damage the small 'island economy' in the middle of the European storm. As such, bowing to political pressure to help save jobs, the Swiss National Bank has decreed that it will keep the Swiss franc at around 1.20 against the euro. This devaluation announcement killed the historic notion of the Swiss franc as a safe haven, and the currency is now effectively the euro in disguise. This strategy is extreme in that the euro is now in a tailspin. Why peg your currency to one that is spiralling down? Because it is the only way to enable the Swiss franc and the local economy to stay somewhat competitive with the euro as it falls every day. Some investors like to take positions betting against the central bank, which was made fashionable when George Soros bet against the pound and the Bank of England in 1992. It's one thing to be Soros and bet against a central bank in trying to artificially hold up a currency. It's another, however, to bet against a central bank that wants to devalue its currency. So long as the central bank holds the Swiss franc to a ratio of 1.2 to the euro, investors are better off holding gold or other currencies like the US dollar or the yuan. Mark Leahy (head of debt origination and fixed income syndicate, Asia ex-Japan for Nomura) was asked: Given that there will soon be a lot of unrated yuan bond issuers coming to Hong Kong, how can individual investors understand the risk they are taking with such unrated issuers? Most dim sum bonds are not rated by independent credit rating agencies, and, therefore, individual investors must perform their own analyses of the issuer's ability to meet its debt repayment obligations. This means developing a keen understanding of the company's financial strength, its management team, and the industry - a job for fund managers who understand the region's high-yield markets. Moreover, investors should know that yuan internationalisation coupled with a gradual opening of domestic markets will result in higher interest rates offshore. This, together with an increased supply of new bonds, will lead to lower prices. But in the medium to long term, the market will challenge the euro-bond market's dominance.