Global investors hunger for dim sum bonds
Updated: 2014-07-08 14:50
(Xinhua)
|
|||||||||||
BEIJING -- Despite a faltering renminbi, record high issuance and growing appetite around the world have reaffirmed the offshore yuan bond as a tempting investment.
Buoyant issuance
"Dim sum" bond issues surged to 277 billion yuan ($44 billion) in the first six months of this year, close to the 280 billion yuan for the whole of 2013, according to researchers with Singapore's DBS Bank. More than 80 percent of issuers were from the Chinese mainland and Hong Kong.
|
|
The spread between onshore and offshore borrowing costs is likely to remain wide, and more companies are expected to borrow overseas in the second half.
On June 30, Huaxia Bank, a mid-sized Chinese commercial lender, issued a dim sum bond at an annual rate of 4.95 percent, much cheaper than domestic levels.
Refinancing may also drive new issues. According to Ivan Chung, senior vice president, Greater China Credit Research and Analysis at Moody's, as two-year and three-year bonds expire this year, issuers will have to refinance, perhaps with longer-term dim sum bonds, and the market will expect more diverse products.
Unflinching enthusiasm
Although renminbi depreciation spooked some currency traders, it did nothing to quell bond buyers enthusiasm to widen exposures to offshore yuan products.
A study by Fitch showed that offshore yuan bonds typically offered investors higher yields than comparatively rated US dollar-denominated bonds. Furthermore, yuan bonds are not as vulnerable to further US QE tapering as bonds of other emerging economies.
As the yuan fluctuates, the offshore yuan bond market keeps to normal fixed-income trading rather than becoming a tool to bet on the yuan.
Top 10 most attractive FDI destinations in the world | Top 10 investors to the Chinese mainland |
Related Stories
Get a second helping of dim sum bonds 2014-05-15 08:10
Appetite growing for dim sum bonds, say experts 2014-04-15 07:15
China CITIC Bank to issue dim sum bonds 2014-02-13 13:59
Fonterra raises $207 million in dim sum bonds 2014-01-22 21:39
ICBC issues dim sum bonds 2013-11-14 10:42
Today's Top News
China, Germany join hands to drive growth
Meet foreigner breed of workers
Product placement deal backfires
From Westlife to the East
Gambling costs World Cup fans their lives
US supports Ukraine's decision to suspend ceasefire
It's all about making a spectacle
China likely to see 7.5% growth in second quarter
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
China helps fight international war on drugs |
Crackdown on terrorist attacks |
My China Story: Meeting the master |
Long march to end employment bias |
Variety is the spice of academic life |
Documents prove the truth can't be buried |