China opens bond market to foreign investors.

Marknadsreaktionerna was subdued on the first trading day with a new link to the China’s bond market, reports Bloomberg News.

Obligationsprogrammet to go via Hong kong and provide a new way for investors to China’s market worth 10.000 billion dollars. The program is similar to the two programs for the stock market link between Hong kong and mainland China, but will only allow for a one-way flow to the world’s third largest bond market. The interest rate on the ten-year bund was up 1 point to the 3.58 percent on Monday.

”The inflows through the linked obligationsprogrammet should be limited and the impact on interest rates is negligible. Foreigners have been allowed to invest in chinese bonds under the previous program,” wrote Jason Daw at Societe Generale in a market comment.

The previous programmes have not, however, managed to increase the foreign holding of bonds to any great extent, and the proportion owned by foreign institutional investors remains low.

The central bank, the PBOC said at the same time that the initiative is a further step to integrate China into the global financial market.

Tradingportalen/Agency Directly.
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