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Poll: 67% of Singapore and Hong Kong investors plan to invest in Chinese onshore bonds in 2019

Sentiment was driven by the upcoming Bloomberg Barclays Global Aggregate Index inclusion in April 2019.

Two thirds or 67% of investors from Singapore and Hong Kong said they expected to invest in Chinese onshore bonds in 2019, according to a survey conducted by Bloomberg.

The top reason cited by the 180 respondents for increasing their investments in the onshore Chinese bond market was the inclusion of Chinese RMB-denominated government and policy bank securities in the Bloomberg Barclays Global Aggregate Index starting April 2019 which phased in over a 20-month period, Bloomberg highlighted. Investors also recognised the low correlation Chinese onshore bonds have with developed markets, citing portfolio diversification as another top reason for investing

Only 8% said they planned to sell their Chinese onshore bond holdings in 2019.

Amongst the respondents, the most cited reason was credit risk (27%) and liquidity issues (21%) across investing concerns. A little over a quarter or 28% of participants in Singapore were found to be more concerned with operational issues such as trading hours, taxation, language when accessing the onshore market, citing this as the second top reason.

"2019 is going to be a tipping point for China's bond market,” Bing Li, head of China for Bloomberg, said in a statement. “This is primarily driven by four factors that contribute to an investable bond market - ongoing policy driven regulation, market access, investor demand and benchmarks. The upcoming index inclusion in April, which is a real vote of confidence for investors, is arguably the biggest development in China's bond market since its inception." 

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