Time to buy Chinese bonds after biggest tumble this year: Analysts
Demand is set to rebound after investments most vulnerable to latest government crackdown are unloaded
Analysts see the biggest tumble in Chinese bonds this year as an opportunity to buy, reports Bloomberg.
The slip in Chinese sovereign bonds came after Beijing announced on Friday new efforts to crack down on excessive leverage in the country’s financial system. But analysts from one of China’s leading bond research teams at China Securities Co see demand rebounding.
“Past experience about regulatory tightening indicates that while markets could be volatile at the beginning due to the adjustments, they return to trade based on economic fundamentals,” Bloomberg quoted China Securities analyst Huang Wentao as saying.
Huang added that “the bottom line is not much has changed in demand for asset management. If banks can’t invest in each other’s products, they have to turn to the bond market.”