(China Alert) RMB credit: Growing up quickly
– China’s fixed income market has grown 14.7% over the past six months
– A larger number of defaults have not deterred new managers from entering the market
– We are observing distinct yield categories forming in China
Update: The first half of 2016 has seen significant changes. We all know that China’s fixed income market is big: it has grown from USD7.5tr to USD8.6tr in six months, but how it is growing is what’s important. Asset types are broadening and, as liquidity builds, RMB credit should become easier to trade. Z-Ben Advisors has identified a new surge in institutional capital searching for yield. With this firmly in play among domestic institutions, foreign firms are also responding to this as RMB credit buying has reached a new high. Structural changes should set the tone for the second half of the year. The benefits of these should extend to investment managers, banks and service providers alike.
China’s RMB credit reforms are akin to converting a 7-11 into a Wal-Mart: …
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