Hong Kong’s appetite for yuan bonds is on the rise, survey finds
According to Standard Chartered, bonds are now the most popular investment choice among assets denominated in the Chinese currency
Hong Kong investors’ appetite for yuan-denominated bonds has increased despite the volatility of the currency in the past year, according to a survey by Standard Chartered.
Bonds have become the most popular asset class among investment products denominated in the Chinese currency, now accounting for 11 per cent of the total, the bank said on Wednesday.
However, yuan-denominated assets as a proportion of total assets held by Hongkongers have dropped by 2 per cent from a year earlier. In particular, the amount held as time deposits - bank deposits that can’t be withdrawn before a set date or for which notice of withdrawal is required - has fallen, the survey found.
The bank’s survey was conducted between September 23 and October 3, coinciding with the yuan’s introduction to the International Monetary Fund’s Special Drawing Rights (SDR) basket of global reserve currencies.
We share the same cautious optimism as our survey respondents towards the RMB’s outlook
“In particular, for RMB bonds, investors may want to focus on government bonds or high quality corporate bonds,” said Will Leung, head of investment strategy, wealth management, Standard Chartered Hong Kong. “The upcoming Shenzhen-Hong Kong Stock Connect is certainly another area to pay attention to.”
The survey showed that, in particular, there was an increasing appetite for yuan-denominated bonds among investors aged 18 to 34, who tend to see the products as their first step in renminbi (RMB) investment.
