BEIJING, May 8 (Xinhua) – China's government bonds and policy bank bonds turned out a popular choice for foreign investors after their inclusion into the Bloomberg Barclays Global Aggregate Index, reported Shanghai Securities News Wednesday.
By the end of April, Chinese yuan-denominated bonds under custodian of foreign institutions rose 28.62 percent year on year to reach 1.53 trillion yuan, of which China’s government bonds and policy bank bonds were the most popular products.
Net purchases by foreign buyers via the Chinese mainland-Hong Kong bond connect program ballooned 60 percent over March to 35.6 billion yuan in April and the number of foreign investors of the kind added 134 ones, up 19 percent month on month.
Since April 1, China’s government bonds and policy bank bonds would be gradually added to the Bloomberg Barclays Global Aggregate Index in 20 months and they altogether will represent a 6.1 percent weighting in the global benchmark.
Analysts said the April data revealed stably increasing holdings of foreign investors including not only funds management firms positively tracking the index but also other funds firms.
As Citi Research predicted, about 151 billion U.S. dollars of capital may be attracted after full inclusion of the Chinese government and policy bank securities into the Bloomberg Barclays Global Aggregate Index.
Currently, entrance of foreign investment into China's bond market further widens. They can purchase bonds in China via Qualified Foreign Institutional Investors (QFII) program, Renminbi QFII (RQFII) program, China Interbank Bond Market Direct (CIBM Direct), which allows a wide range of foreign institutional investors to gain access to China's onshore bond market, and the Chinese-mainland Hong-Kong bond connect program.
Latest statistics from the State Administration of Foreign Exchange (SAFE) showed China approved 9 QFII of 4.2 billion U.S. dollars of investment quotas in April and 9.7 billion yuan of quotas for 5 RQFII.
In the first four months of 2019, China approved in total 13 QFII of 4.74 billion U.S. dollars of quotas, higher than the annual aggregate of 2018 and 12 RQFII of 24 billion yuan of quotas, higher than a half of the quotas nodded in 2018 annually.
At a tenor when global bond market volatility increases, performances of Chinese government bonds absolutely fall within people’s expectation towards safe-haven assets therefore global investors generally take this type of assets as a safe harbor, analysts held. (Edited by Duan Jing, duanjing@xinhua.org)
A single purchase
