With yields near zero for most developed nation bonds, the nearly 3.1% offered by China’s benchmark 10-year notes has been pulling in investors from Singapore to the UK. Inflows into the nation’s debt market from overseas investors jumped nearly 40% a year since 2017 to a record US$383 billion ($524.19 billion) by the end of June, central bank data as of the end of June showed. That’s yet to have much impact on the bonds given foreigners account for less than 3% of the US$16 trillion market.
Foreign investors are likely to have a new channel to invest in China’s government bonds.
FTSE Russell will announce whether it will add the nation’s sovereign debt into its indexes after US markets close on Thursday, a year after rejecting the notes. Morgan Stanley puts the odds of inclusion this time around at 90%.
