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Squeeze Hits Local Government Bonds

China’s local governments have started to access the stock exchange market to sell bonds after Beijing’s monetary and regulatory tightening has weakened demand, sharply boosted yields, and depressed issuance levels. With trillions of yuan in local government issues in the pipeline and yields in the interbank market expected to remain high, a rise in local bond sales in the stock exchange market could divert funding from corporate bonds and equities.

Posted August 1, 2017
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