A year after Sept. 11, 2001, Asian stock and bond markets are looking a lot less risky than their U.S. and European counterparts, which have been hard-hit by accounting and corporate-governance scandals and a barrage of bankruptcy filings, fund managers and analysts say. Scandals involving Enron Corp. and WorldCom Inc. have done as much to shake markets world-wide as the attacks on New York and Washington did,” writes Karen Richardson in today’s Wall Street Journal.

“The most palpable effects on Asia during the past year, they say, have been the increased investor interest in the region and the rehabilitation of Asia’s image from a treacherous gambling den to a haven.”

” ‘Asia has proven itself, especially over the past two years, when there’s been a lot of trauma internationally,’ says Jason Carley, head of Asian credit research at Merrill Lynch & Co. in Hong Kong. “As the current challenges around the world continue to play out, we’ve seen a lot of interest from international investors due to Asia’s defensiveness.’ “

“Not that there weren’t shocks. Like travelers who canceled their flights and executives who fretted about safety in their top-floor offices, Asia’s stock-and-bond investors panicked immediately after the terrorist attacks. Stock markets from Singapore to Seoul tested selling limits. Mutual-fund companies prevented customers from redeeming their investments. Southeast Asian bond yields soared and bond prices plunged.”

“Bond yields still are up from where they were last year, but just barely. That is in keeping with a global flight to safe U.S. and other Western-government bonds since Sept. 11, but it also is because of traditionally lower liquidity in Asia relative to other markets. According to Merrill Lynch’s index of Asian-investment-grade bonds, Asian corporate and sovereign bonds are trading at roughly 1.66 percentage points over U.S. Treasury paper of comparable maturity, compared with 1.56 percentage points over U.S. Treasurys at the end of 2001.”

“High-grade U.S. corporate bonds, by comparison, are trading at 2.24 percentage points over Treasurys, 0.62 percentage point higher than the average spread of 1.62 percentage points for higher-grade credit at the end of last year.”

” ‘Asia may not have the absolutely most exciting spreads, but nor does it have the most exciting credit disasters,’ Mr. Carley says. ‘High-grade Asia is a pretty dull place to be, but it’s quite attractive in a global sense right now.’ “