1/7
Foreign portfolio investors continue to pour money into Chinese stocks and bonds, accumulating around $800 billion to date. Although I have been recommending these markets to my clients for nearly two years, and continue to do so, I think some...
ft.com/content/4b4f1a…
Foreign portfolio investors continue to pour money into Chinese stocks and bonds, accumulating around $800 billion to date. Although I have been recommending these markets to my clients for nearly two years, and continue to do so, I think some...
ft.com/content/4b4f1a…
2/7
of the people cited in this article – as they often do with China-related events – may be overhyping the implications.
I think it is a mistake, for example, to see foreign buying of RMB-denominated government bonds as part of the advancing internationalization of the...
of the people cited in this article – as they often do with China-related events – may be overhyping the implications.
I think it is a mistake, for example, to see foreign buying of RMB-denominated government bonds as part of the advancing internationalization of the...
3/7
...currency, any more than it would be the case for foreign buying of Brazilian government bonds in reais, Mexican government bonds in pesos or South Korean government bonds in won (and in all three countries, foreign investors play a far greater role than they do in China).
...currency, any more than it would be the case for foreign buying of Brazilian government bonds in reais, Mexican government bonds in pesos or South Korean government bonds in won (and in all three countries, foreign investors play a far greater role than they do in China).
4/7
All it means is that for now these bonds have attractive yields and diversification benefits and limited depreciation risk. But while foreign investors can pour into a developing market when conditions look good, they tend to flee the market when conditions reverse.
All it means is that for now these bonds have attractive yields and diversification benefits and limited depreciation risk. But while foreign investors can pour into a developing market when conditions look good, they tend to flee the market when conditions reverse.
5/7
Perhaps this won’t happen in China, but there is as of yet absolutely no reason to make that assumption, nor is there evidence that foreign investors are treating Chinese markets in the same way they treat US, European, Japanese or British financial markets.
Perhaps this won’t happen in China, but there is as of yet absolutely no reason to make that assumption, nor is there evidence that foreign investors are treating Chinese markets in the same way they treat US, European, Japanese or British financial markets.
6/7
The point is that while local bond markets in China are very attractive – and in my opinion will continue to be for at least another year or two – they are still illiquid and non-transparent, and not only is foreign participation much lower than it is in the major...
The point is that while local bond markets in China are very attractive – and in my opinion will continue to be for at least another year or two – they are still illiquid and non-transparent, and not only is foreign participation much lower than it is in the major...
7/7
developed markets, it is also much lower than it is in most large developing countries (which, frankly, is part of the reason why I think the Chinese financial markets are still attractive).
developed markets, it is also much lower than it is in most large developing countries (which, frankly, is part of the reason why I think the Chinese financial markets are still attractive).
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