Euromoney, February 2016
The turmoil in China’s currency and assets has caused ructions in markets all over the world, from stocks to other currencies. But a little-observed consequence may be a change in the issuance and investment dynamics of China’s onshore and offshore bonds and, maybe, a death knell for the dim sum bond market.
Ever since China began liberalizing its currency, and in particular since the launch of the offshore dim sum bond market, there has been a difference between the onshore and offshore behaviour of the currency and the bonds priced in them. Often volatile, this gap reached an all-time high in early January – only to vanish completely a week later.