“Investors needed to diversify their investments,” said Qi Sheng, an analyst at Orient Securities.
A bond bull run in China last year drove the yields to record-low levels, making dollar bonds and Dim Sum bonds attractive to Chinese investors looking for higher yields.
Yields in the nation’s benchmark 10-year bonds have plunged over 30 basis points to around 1.65% since the beginning of December, dragged by poor domestic consumption and expectations for more monetary easing to boost the sluggish economy. China’s yield discount to the US also widened to a record earlier this month, amplifying the allure of foreign assets.
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With analysts expecting the People’s Bank of China to further ease monetary policy, some investors see yields heading toward 1% or lower.
Chart: Bloomberg
