Despite investors moving from bonds to stocks, the Chinese government took action. According to Bloomberg’s report, Chinese authorities have called on banks to buy bonds.
It was stated that the Chinese authorities have called on the largest insurance companies in the country to buy the bonds that individual investors have begun to sell heavily.
According to Bloomberg’s report, some bank executives at the meeting also proposed activating their private banking units to support the bond market.
With the recent easing of the Kovid-19 measures in China at an increasing rate, individual investors began to buy stocks, which are expected to be positively affected by the opening of the economy, deteriorating their bond positions. This resulted in higher yields on sovereign bonds.
China’s 10-year government bond yield rose seven basis points over the past week, hitting its highest level since November 2021 for a while. China, which has lifted PCR requirements in many regions and many areas this week, has finally begun to allow home quarantine. According to the Wen Wei Po newspaper news this morning, the Hong Kong administration is preparing to remove the mask requirement in the open air.
Meanwhile, JPMorgan Asia and China Equity Strategy Director Wendy Liu said she sees a 10 percent upside potential in the MSCI China Index by the end of 2023.
