Tag Archives: RQFII
Asian Fixed Income: The Birth of Bond Connect
As a follow up to the previous article, Bond Connect officially launched on July 3, 2017. Bond Connect allows international market participants to trade China’s interbank bonds through the Hong Kong Stock Exchange. It marked a milestone in China to further open up its capital market, following the China Interbank Bond Market (CIBM) announcement last…
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Asia Fixed Income: Foreign Investor Access to Onshore Chinese Bond Markets Grows
China continues to broaden foreign investor access to their onshore bond market. Luxembourg is the latest country being granted an RQFII quota by the People’s Bank of China, followed Canada, Germany, Qatar and Australia. According to the data published by State Administration of Foreign Exchange (SAFE) on April 29, 2015, the approved RQFII investment quota…
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Asia Fixed Income: China Onshore vs. Offshore
The China offshore renminbi (CNH) bond market has been serving some investors as a gateway to Chinese bonds until the Renminbi Qualified Foreign Institutional Investor (RQFII) program takes off. The size of offshore renminbi market is approaching CNH 800 billion, yet it is relatively small when compared with the CNY 27 trillion onshore bond market,…
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Asia Fixed Income: 2014 Pan Asia Report Card
As the global yields remain low, many yield-hungry investors have turned to Asia for yield pickup and portfolio diversification. Exhibit 1 lists the yield-to-worst of the ten local currency bond markets tracked by the S&P Pan Asia Bond Index. Exhibit 1: The Yield-to-Worst of the Pan Asian Bond Indices Reflecting the strong demand and continuous…
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Asia Fixed Income: Post the Rate Cut by PBoC
The People’s Bank of China (PBoC) announced rate cuts on Nov 21; with 1-year deposit rate lowered by 25bps to 2.75% and the lending rate lowered by 40bps to 5.60%. The market is expecting the rate cut not only to revive the growth but also accelerate the interest rate liberalization. The cash bonds responded favorably…
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Two Interesting Facts of the Chinese Bond Market Volatility
The S&P China Bond Index is targeted to provide global investors an independent, transparent and broad-based benchmark. A study of the index returns revealed two interesting facts on the Chinese bond market volatility. 1) While the volatilities of most Asian bonds retreated in the past year, the Chinese bonds have actually become more volatile. The…
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Asia Fixed Income: How Big is the Pan Asia Bond Market?
The S&P Pan Asia Bond Index tracks the performance of the local currency bonds in the 10 Pan Asian countries. The market value tracked by the S&P Pan Asia Bond Index has expanded three fold to USD 6.7 trillion since the index’s first value on Dec. 29, 2006. This rapid expansion warrant some attention as…
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