Wednesday, April 20, 2016

Why are Chinese bond yields rising?


From Bloomberg:
Spooked by a fresh wave of defaults at state-owned enterprises, investors in China’s yuan-denominated company notes have driven up yields for nine of the past 10 days and triggered the biggest selloff in onshore junk debt since 2014. Local issuers have canceled 61.9 billion yuan ($9.6 billion) of bond sales in April alone, and Standard & Poor’s is cutting its assessment of Chinese firms at a pace unseen since 2003.
Remember that an increasing yield means a declining price, which represents a decrease in demand, as inestors (lenders) demand higher return to compensate them for the higher risk. 
HT:  MarginalRevolution.com

1 comment:

  1. Honestly, I am not sure about the reason, but one thing I will say we need to make sure we work only with having solid reason or else we could face heavily losses. I am currently trading with OctaFX Company, its world class with having great daily market news and analysis service, so simply following that leads me to great profits and that too fairly consistently, it allows me to be successful and allows me to be so much comfortable.

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