Asia Pacific
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Failure to raise Japan’s consumption tax could force long-term Japanese Government Bonds (JGBs) yields to jump as early as next month at a time when ballooning debt is threatening the creditworthiness of the sovereign.
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Australia and New Zealand Bank (ANZ) issued a A$700m 10 year covered bond overnight on Thursday, in the longest ever maturing deal in that currency. Large parts of the Asian market were on holiday but the deal attracted far greater interest than had been expected and priced at tighter levels than could have been achieved in euros
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Far East Horizon has broken a six-week lull in offshore renminbi bonds, responding to reverse enquiry to reopen its 4.5% March 2016 deal and raise an additional Rmb300m ($49m).
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A dearth of activity in the public offshore renminbi debt market has led to more investor enquiries for private placements.
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Average dim sum bond yields are expected to fluctuate within a narrow range in August until investors gain better clarity to the uncertainty that is dampening market sentiment, says the bank. -
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In this week’s round up of offshore renminbi news, Hong Kong’s deposits drop month-on-month, the dim sum market makes a recovery, and DBS sees flaws in China’s renminbi internationalisation plans.
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China has been wary of opening its capital markets up to property developers, and for good reason. Yet regulators must consider the many upsides of reversing their hard-line stance.
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A reduction in the reserve requirement ratio (RRR) is necessary in order for China to deal with its long-term structural liquidity shortage and the first cut could come as early as the fourth quarter, say experts.
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Mainland property developers may get access to China’s onshore bond market for the first time since 2009, marking a departure from regulators’ hard-line stance on the sector in recent years.
