China Stock Rout Sends Local Funds Scurrying to Safety of Bonds
- Yield on 10-year sovereign notes heads for lowest since 2002
- Chinese equities are cheapest they have ever been versus bonds
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China’s domestic investors are abandoning the nation’s equities for the safety of bonds as concerns mount about the deteriorating economic outlook.
Yields on 30-year government securities dropped to the lowest in almost two decades this week, and futures on the notes recorded one of the biggest daily jumps since April 2023. The moves came after the benchmark CSI 300 Index of shares plummeted to a five-year low amid signs of a wider exodus from the world’s second-biggest economy.