Bonds Jun 26

China local-currency bond market largest in East Asia 

ADB says deregulation has enabled growth of yuan-denominated fixed-income market 

China local-currency bond market largest in East Asia 

(ATF) China remains the largest local currency bond market in emerging East Asia, accounting for 76.6% of the total bond stock at the end of the first quarter of 2020, said the latest issue of Asia Bond Monitor published by the Asian Development Bank (ADB).

The local currency bond market of China remains the largest in emerging East Asia at US$12.5 trillion at the end of the first quarter of 2020, representing 76.6% of the region’s total bond stock. This is 4.9% higher compared to China’s bond stock at the end of the fourth quarter of 2019 and 16.1% bigger compared to the same period last year, said the ADB.

Citing data from the report, the ADB said China’s corporate bond market grew 7.3% to reach $4.6 trillion in the first quarter of 2020 from the fourth quarter of last year after the Chinese government in March simplified the issuance process for listed corporate and enterprise bonds.

Government bonds increased 3.5% quarter-on-quarter to reach $7.9 trillion as local government bond issuance increased, the ADB said.

The ADB said the Hong Kong Special Administrative Region’s local currency bonds amounted to $291 billion after a 0.5% quarter-on-quarter contraction in the first quarter of 2020.