(ATF) Chinese corporate and local government bonds inched higher for a sixth day, the longest winning streak since April, as investors buoyed by the increasing likelihood of a Joe Biden presidency in the US sought riskier debt.
The benchmark ATF China Bond 50 Index advanced 0.1%, fuelled by a surge in the bond of Nanjing Pukou Economic Development, which outweighed a steep decline in the debt of Nanjing State-Owned Assets after a coupon payment.
That dragged down the Allindex Enterprise sub-index, which slid 0.09%; Corporates and Financials were flat and Local Governments advance 0.1%.
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Investors are buying risk assets, lifting stocks on Asia, Europe and the US as late tallies in the US election pointed to a victory for the Democratic challenger despite legal challenges to many counts by President Donald Trump. Analysts have said a Biden presidency would raise hopes of more pandemic-recovery stimulus.
Yields on infrastructure builder Nanjing Pukou Economic Development’s 3.9% bond fell 4.95% as the Ministry of Finance said recovery bond issuance by local governments and cities would be allowed to climb to 6.6 trillion yuan ($980 billion). With most of that money targets at improving roads, bridges and other public facilities, infrastructure developers are likely to benefit form the additional raised capital.
Nanjing State-Owned Assets’ 4.27% bond fell 4.07% after it paid out on its coupon. Bond values drop after coupon payments because the amount interest paid out on the fixed income assets is reduced.
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