BEIJING, Feb. 28 (Xinhua) -- Average daily turnover of northbound Bond Connect reached a new historical high at 48.7 billion yuan in January, testifying, as market players said, the increasing attractiveness of bond products in China, reported Securities Daily on Wednesday.
Northbound trading which commenced on July 3, 2017, offers China interbank bond market (CIBM) access to overseas investors under the Bond Connect scheme, a mutual market access program that enables investors from the Chinese mainland and Hong Kong to trade in each other's bond markets.
The following chart shows the trading activities under northbound trading of Bond Connect in January.
(Source: Bond Connect Company Limited)
Among all the bonds available for northbound trading, Treasury bonds embraced the most active trading in January, accounting for 65 percent of the 1.071 trillion yuan monthly total.
The all-time high average daily turnover for northbound trading in January revealed acceleration in overseas investment in China's bond market, Fan Ruoying, a researcher with the research institute of Bank of China told the newspaper.
Apart from being a good option to diversify assets, China's bond market remained attractive to international investors thanks to its continuously improved investment facilitation to overseas institutions and more and more enriched products tradable under the northbound Bond Connect, according to Fan.
In January this year, Chinese regulators released an opinion-inviting circular to further support overseas institutional investors to conduct bond repurchase (repo) transactions on the interbank bond market.
Market players generally considered the move as a milestone in the high-level opening up of China's financial market as it would help satisfy the growing investment and financing demand of overseas institutions and enrich their liquidity management tools, said Ming Ming, chief economist with CITIC Securities.
Moreover, a short-term bull run since the start of this year also added to Chinese bond market's attractiveness for global investors, noted Fan, expecting Renminbi-denominated bonds to become increasingly attractive to overseas institutions in future. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
