Pune Magazine

Foreign Investors Exit China Bonds for Fifth Straight Month

 Breaking News
  • No posts were found

Foreign Investors Exit China Bonds for Fifth Straight Month

August 10
01:48 2022

A slowing economy has driven foreign investors out of China bonds for a fifth straight month. China’s $20 trillion bond market has suffered continuous foreign outflows since February amid rising geopolitical tension and lingering Covid-19 outbreaks.

In June, foreign holdings of yuan bonds traded on China’s interbank bond market totalled 3.57 trillion yuan ($527.5 billion) at the end of June, down from 3.66 trillion yuan a month earlier.

The yield of 10-year Chinese central government bonds is roughly 12 basis points lower than that of their US counterparts, compared with a premium of nearly 130 basis points at the end of last year.

More turmoil in China’s property markets, where homebuyers are refusing to repay mortgages on unfinished apartments (in several hundred projects), could sour foreigners’ sentiment further.

But with China’s fiscal health better than other big countries’, and growth clouds hanging over the rest of the world, she said outflows could slow and the yuan could recover some of what it had lost this year.

Already the pace of outflows has slowed and the lockdown of Shanghai ended last month. China has also launched stimulus measures to aid an economy that grew just 2.5% in the first half.

China took fresh steps this month to lure foreign bond investors, saying it would cut service fees, improve overseas access to foreign exchange hedging, and streamline the process of opening accounts.

Foreign holdings in Chinese bonds more than tripled from 2019 to 2021, but remain relatively small, accounting for 2.9% of the interbank debt market.

About Us:

Founded in 2012 with a vision to provide clients with a service they can trust, Sirius Financial Consulting is an internationally reputed private wealth management firm headquartered in Japan. Offering a full range of financial services to clients based around the world, we deliver impartial guidance by leveraging our industry expertise and unique insight into markets and their opportunities.

Sirius Financial Consulting

Pentel Building Chuo-ku Tokyo Japan

Contact: Martin Chen

Phone: +81 50 5534 1193

E-mail: [email protected]  

Web: www.siriusfinancialconsulting.com  

Media Contact
Company Name: Sirius Financial Consulting
Contact Person: Martin Chen
Email: Send Email
Phone: +81 50 5534 1193
Country: Japan
Website: www.siriusfinancialconsulting.com