China’s onshore defaults will surpass last year’s total, but Wong Yii Hui said her highly-concentrated portfolio avoids certain companies.
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China’s onshore defaults will surpass last year’s total, but Wong Yii Hui said her highly-concentrated portfolio avoids certain companies.
Opportunity is in the more liquid onshore bonds, says Yii-Hui Wong, portfolio manager at UBS Asset Management.
Despite recent defaults on China bonds, China Asset Management has today listed a fixed income exchange-traded fund that tracks a China onshore bond index.
Aberdeen Standard Investments’ launch of a China bond fund in Europe signals a pick up in global manager interest in China’s $9trn onshore bond market.
China will see a stronger renminbi and a looser money supply in 2018, as the authorities’ agenda aimed at curbing domestic leverage evolves, argues Gregory Suen, investment director for Asian fixed income at HSBC Global Asset Management.
A stabilised currency, improved liquidity and a more mature credit culture are what will attract investment in onshore Chinese bonds, industry sources said.
Chinese government bond yields have surged due to regulatory actions, presenting a buying opportunity, according to several fund managers.
Following the Stock Connect scheme, Bond Connect aims to become the most convenient channel for foreign institutional investors to enter the Chinese fixed income market, industry sources said.
Inclusion on major bond indices could attract $200bn of inflows by the end the year, said Margaret Harwood-Jones, Standard Chartered head of investors and intermediaries based in Singapore.
Citi’s EM and regional government bond indices will add China, following a similar move by Bloomberg Barclays. However, Chinese government bonds will not join Citi’s larger World Government Bond Index (WGBI).
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