China’s New Bond Channel Lures Higher Volumes from Global Funds

Overseas investors are gradually increasing their use of a new bond repurchase facility for their purchases of Chinese bonds after the nation gave them greater access to the onshore repo market in September.

Offshore funds conducted 13.1 billion yuan ($1.84 billion) of bond repurchases via the Bond Connect channel from Hong Kong in October, up from 810 million yuan the previous month, according to data from China Central Depository & Clearing Co. Repo markets facilitate short-term borrowing where one party sells securities to another with an agreement to buy them back at a later date.