Chi­nese bonds gain more global trac­tion

China Daily (Canada) - - VIEWS - By DUAN TING in Hong Kong tingduan@chi­nadai­

Bloomberg says it will in­clude China in new in­dexes

The in­clu­sion of China’s on­shore bonds in ma­jor global in­dexes will ac­cel­er­ate over the next cou­ple of years, ac­cord­ing to fund man­agers in­Hong Kong.

Bloomberg an­nounced on Wed­nes­day that its Bloomberg Bar­clays bond in­dexes will launch two new in­dexes to in­cor­po­rate com­po­nents of the China Ag­gre­gate In­dex and is likely to in­clude on­shore Chi­nese gov­ern­ment bonds and some bank debt in its flag­ship global ag­gre­gate in­dex.

Also ac­cord­ing to Bloomberg, US global in­vest­ment man­age­ment cor­po­ra­tion Black Rock Inc said China’s in­clu­sion in ma­jor global bond in­dexes may be an­nounced this year.

Bryan Collins, port­fo­lio man­ager at Fi­delity In­ter­na­tional, said he be­lieves the in­clu­sion will be an en­cour­ag­ing step to re­in­force the rel­e­vancy and im­por­tance of RMB bonds in the global fixed in­come mar­ket, al­though the change will be a pro­gres­sive process which will take a cou­ple of years.

The Chi­nese main­land is home to the world’s sec­ond­largest stock mar­ket and the third-largest bond mar­ket, Collins noted, adding that the in­clu­sion of RMB bonds into global in­dexes will help raise the pro­file of the China mar­ket among in­vestors.

Grow­ing global at­ten­tion to­ward Chi­nese bonds will also help China ac­cel­er­ate the re­form of its do­mes­tic reg­u­la­tory regime, and in­tro­duce best prac­tices from global mar­kets.

Collins said Fi­delity has been in­vest­ing in on­shore bonds for “quite some time” and its ex­po­sure is likely to in­crease over time.

Bloomberg also an­nounced on Tues­day changes to its Bloomberg Bar­clays fixed in­come in­dexes and cur­rency in­dexes. Owned by par­ent com­pany Bloomberg News, the for­mer Bar­clays Risk An­a­lyt­ics and In­dex So­lu­tions busi­ness, in­clud­ing bench­mark in­dexes, has been co-branded as Bloomberg Bar­clays In­dexes.

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