Enterprise bonds send China debt gauge higher

Suspension of rating business linked to rash of defaults last month buoys investors

Enterprise bonds send China debt gauge higher

(ATF) The bonds of Chinese state-linked companies rallied Tuesday after a selloff the day earlier was judged overdone and following an announcement by China’s regulators that they’d suspended a rating firm over its role in the the default of a huge miner that roiled markets last months.

The benchmark ATF China Bond 50 Index climbed after People's Bank of China (PBOC), the National Development and Reform Commission and the China Securities Regulatory Commission said they’d tidied up disclosure rules for corporate bonds.

The CB50 rose 0.02%, extending a Christmas-week surge to 0.13%. The Enterprise sub-index, which comprises state-owned-enterprises (SOEs), surged 0.06% after sliding 0.11% on Monday. Of the other sub-indexes Corporates rose 0.01%, Financials added 0.02% and Local Governments lost 0.03%.

The credit rating business of China Chengxin International Credit Rating Co (CCXI) was suspended by the National Association of Financial Market Institutional Investors. It said CCXI violated rules after its client, Yongcheng Coal & Electricity Holding Group, defaulted on a 1 billion yuan ($153.17 million) bond on November 10, just weeks after it sold fresh debt, sending shockwaves across China's bond market.

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