China suspends daily release of source bond holder data

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SHANGHAI, May 17 (Reuters)China has halted daily updates of bond trading data for foreign institutions, six sources with knowledge of the matter said on Tuesday, as lockdowns continued to cripple the country’s financial hub and foreigners reduced their holdings of Chinese assets.

Daily data is now only available to onshore institutional clients, the sources said.

“Data on May 12 transactions in the foreign institutions category disappeared,” a source said, speculating that it followed a sharp depreciation of the yuan and large capital outflows. Earlier data showed foreign investors remained in a net short position recently, another source said.

The shutdown comes with a long delay in releasing monthly data on bond holdings by interbank market depositories China Central Depository and Clearing Co (CCDC) and the Shanghai Clearing House.

Monthly data, usually released well into the first half of the month, had shown over the previous two months that foreign investors had sharply reduced their holdings of Chinese bonds. Foreign holdings of Chinese sovereign debt fell at the highest rate since August 2015 last month.

In response to questions from Reuters, a CCDC official said the April data had been delayed due to “epidemic factors” but would be released at an unspecified later date.

Most of the 25 million people in China’s financial hub of Shanghai have been under a strict lockdown, now in its seventh week, that has wreaked havoc on economic activity. On Tuesday, the city set its clearest timetable yet for the end of restrictions.

Data released last week by the International Institute of Finance (IIF) showed the largest quarterly capital outflows on record for China in the first quarter.

“April saw a similar pattern, with Chinese debt experiencing a $2.1 billion outflow and only marginal gains on Chinese equities,” the IIF said in a report.

The yuan CNY=CFXS fell more than 4% against the dollar in April as the Chinese economy slowed and divergent monetary policy between the United States and China wiped out premiums on Chinese debt.

Benchmark 10-year Chinese government bonds yielded around 11 basis points less than their US counterparts on Tuesday, down from a premium of nearly 125 basis points at the end of 2021. US10CN10=RR

(Reporting by Xiangming Hou, Steven Bian, Fang Wu and Andrew Galbraith; Editing by Bernadette Baum)

(([email protected]; +86 21 2083 0079; Reuters Messaging: andrew.galbraith.[email protected]; Twitter: https://twitter.com/apgalbraith))

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