Yuan Hong Kong Discount Shrinks on Dim Sum Demand: China Credit

The discount investors benefit from by buying yuan in Hong Kong is disappearing as China’s shift toward policies that support economic growth spurs demand for Dim Sum bonds.

The discount fell to 0.2 percent today from a record 1.9 percent on Sept. 23, according to data compiled by Bloomberg. The currency strengthened 0.5 percent this month in offshore trading after a 1.6 percent jump in October that was the biggest advance in a year. Yuan-denominated debt sold in Hong Kong rose in each of the last four weeks, the longest winning streak since May, according to the Deutsche Bank Offshore Renminbi Bond Index.