China Government Bonds via LST
The following got my attention:
- The People’s Bank of China said in a statement on its website Wednesday that most types of overseas financial institutions will no longer require quotas to invest in the interbank bond market, which accounts for the bulk of debt in the nation.
- Commercial lenders, insurance companies, securities firms and asset managers were included on a list of those eligible and the authority said it also hopes to attract long-term investors such as pension funds and charities.
- Hedge funds were not included, while foreign central banks and sovereign wealth funds won access in June.
- Bonds outstanding in China totaled 48.8 trillion yuan ($7.5 trillion) at the end of December, according to the central bank.
- The interbank market totaled 35 trillion yuan at the end of January
- Foreigners held less than 2 percent of this, ChinaBond data show.
- China’s 10-year sovereign yield of 2.87 percent compares with 1.69 percent in the U.S., the world’s largest bond market, and sub-zero in second-ranked Japan.