Indonesia’s Side of the JP Morgan Row
1 May, 2017
Indonesia’s Tax Amnesty Bears Fruit
1 May, 2017
Show all

Euromoney, May 2017

With the planned launched a of a new bond-trading link between Hong Kong and the mainland and the inclusion of Chinese domestic bonds in some international indices, it appears that international access to the world’s third-largest debt market is easier than ever. But don’t be fooled, we are still years from meaningful engagement of international capital in this Rmb64 trillion ($9.3 trillion) market.

“Keen would be an overstatement,” says Chantal Grinderslev, senior adviser at Z-Ben Advisors in Shanghai, when asked if her international clients are keen to get greater exposure to Chinese domestic bonds. “Bond inclusion right now is a non-issue.

“There’s a general acknowledgement that the fixed income market has potential in the long term. Unfortunately, long-term potential means underinvestment today in managers’ capabilities to service those flows.

“We’re talking about the world’s second-largest economy, third-largest fixed income market and yet most global asset managers have zero exposure to renminbi fixed income.”

Foreigners held only 1.3% of China’s interbank market at the end of 2016. The definition of an interbank market is different in China to elsewhere in the world: in China, it accounts for more than 90% of all traded bonds in the country.

Full article: http://www.euromoney.com/Article/3715263/Asia-China-debt-breakthroughs-meet-investor-indifference.html?copyrightInfo=true

Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

Leave a Reply

Your email address will not be published. Required fields are marked *