How the incision of China Government Bonds in FTSE Russell Indices Bring out Capital Inflow of China

How the incision of China Government Bonds in FTSE Russell Indices Bring out Capital Inflow of China

FTSE Russell included China Government BondsGovernment Bonds


Recently, FTSE Russell had delisted some China Stocks like SMIC and Hikvision in its China A50 index because of the U.S. sanction measures. After the delisted, at least $10 billion flow out in the stock market.

However, FTSE Russell is now planning to include China Government Bonds in its global index. According to Goldman Sachs, at least $10- $15 billion US Dollars flow into the China Government Bonds Market each month, an increase of $5 billion each month.

The analyst points out that other global indices like Bloomberg Barclays Indices and JP Morgen's GBI-EM index are also planning to include more China Government Bonds in its Index. Therefore, from my perspective, a more potential inflow of capital is planning to enter the China Bond Market.

As China government bonds provide a higher yield to the investor, foreign investors are looking for more channels to get into China's bond market to add to their portfolio. After FTSE Russell includes China government bonds in its index, foreign investors and passive investors can easily invest those bonds by investing in the FTSE Russell Index and other trackers funds. Therefore, the incision of China government bonds in global indices can attract more capital inflow in China Market.

Reference: https://financialpost.com/pmn/business-pmn/msci-ftse-russell-drop-chinese-telcos-shares-lose-10-bln-in-value

https://money.udn.com/money/story/5599/5186153

https://www.globaltimes.cn/page/202101/1213247.shtml

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