Corporates climb on bank bond purchase bets

Benchmark gauge stable at end of month of coupon payouts

Corporates climb on bank bond purchase bets

(ATF) Chinese corporate credits climbed for a fifth day Wednesday following a report that some of the nation’s banks were planning to increase bond purchases.

The gains were not enough to budge the broader market higher as investors sat on the sidelines. Stock markets fell and money managers awaited signals from the US on the next round of stimulus.

ATF Index’s corporate bonds gauge climbed 0.04%. The benchmark ATF China Bond 50 Index was little changed at 106.62. It’s declined 0.32% in March as markets have digested data that suggest inflation will rise with the re-ignition of the global economy from the pandemic downturn.

It’s also been held down by a slew of coupon payments, which weigh on bond prices because they reduce the fixed pool of interest the securities pay out over their lifetime.

S&P Global said banks may step up bond purchases to alleviate pressure on their interest margins. The report follows a slump in margins at banks including Bank of China’s NIM and Industrial & Commercial Bank of China. 

China Bonds China Bonds