Bubble Seen in China Bonds as Record Borrowings Raise Stakes
- 19 out of 21 surveyed say corporate bonds are overheating
- 60 percent say corporate bond yield premiums are on the rise
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China’s red-hot corporate bond market may be the country’s next asset bubble after the stock rout. That’s the message from financial companies surveyed by Bloomberg.
The credit market is “overheating,” according to nineteen of 21 respondents in a survey of onshore analysts, traders and fund managers. Chinese companies sold a record 3.5 trillion yuan($550 billion) of notes this quarter, up 90 percent from the same period last year, as borrowing costs plunged to six-year lows. Risks of a bubble have emerged, according to Industrial Securities Co. and Huachuang Securities Co.