(China Alert) Bond market volatility: Let it snow, let it snow, let it snow
-The rapid movement of institutional capital into fixed income this year has culminated in a liquidity crunch
-We believe managers will readjust their institutional business and investment strategy in 2017
Update: While things quiet down as many head home for the holidays, China has been aflutter. Over the past few days, there has been a bond market correction linked to a liquidity crunch. Redemptions from large institutional capital are rumored to be involved. Fixed income managers have been affected, including the seemingly sturdy realm of money market funds (MMFs), albeit just redemptions so far: it hasn’t gotten to the point of inflicting casualties yet. Z-Ben Advisors believes this is a wake-up call for managers and regulators.
The correction itself may have started attracting attention recently but the events directly leading up to it began …
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