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Tiongkok Gov Bond Huat Big Big in last 24hr, dun miss the boat :)
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Chinese government bonds are on fire. That’s ringing alarm bells in Beijing
Analysis by Laura He, CNNUpdated 6:07 AM EDT, Wed July 3, 2024
Qilai Shen/Bloomberg/Getty Images
Pedestrians cross a road in Pudong's Lujiazui Financial District in Shanghai, China, on Saturday, May 11, 2024.
Hong KongCNN —
Money is rushing into Chinese government bonds, sending their prices soaring and yields plunging to record lows as investors hunt for a safer alternative to the country’s ravaged real estate market and volatile stocks.
The yield on China’s onshore 10-year government bond, which is a benchmark for a wide range of interest rates, touched 2.18% Monday, the lowest since 2002 when records began. Yields on 20-year and 30-year bonds are also hovering around historic lows. Bond yields, or the returns offered to investors for holding them, fall as prices rise.
Lower borrowing costs should be welcome in an economy struggling to recover from a property crash, sluggish consumer spending and weak business confidence. But the sharp move in bonds is sparking talk of a bubble and triggering acute anxiety among China’s policymakers, who fear a crisis similar to the collapse of Silicon Valley Bank (SVB) last year.
The People’s Bank of China (PBOC) has issued over 10 separate warnings since April about the risk that a bond bubble could burst, destabilizing financial markets and derailing the Chinese economy’s uneven recovery. Now it’s doing something unprecedented —borrowing bonds to sell them to tamp down prices.
“SVB in the United States has taught us that the central bank needs to observe and evaluate the situation of the financial market from a macro-prudential perspective,” PBOC Governor Pan Gongsheng said at a financial forum in Shanghai late last month.
“At present, we must pay close attention to the maturity mismatch and interest rate risks associated with the large holdings of medium and long-term bonds by some non-bank entities,” the central bank governor added. Those entities include insurance companies, investment funds and other financial firms.
“SVB in the United States has taught us that the central bank needs to observe and evaluate the situation of the financial market from a macro-prudential perspective,” PBOC Governor Pan Gongsheng said at a financial forum in Shanghai late last month.
“At present, we must pay close attention to the maturity mismatch and interest rate risks associated with the large holdings of medium and long-term bonds by some non-bank entities,” the central bank governor added. Those entities include insurance companies, investment funds and other financial firms.
Lessons from the US
SVB was the biggest US bank failure since the global financial crisis. The roots of its demise lay in the fact that SVB had ploughed billions into US government bonds, an apparently safe bet that came unstuck when the Federal Reserve began hiking interest rates to tame inflation. Prices of the bonds SVB was holding fell, eroding its finances.Policymakers in China fear the risk of a similar crisis in the world’s second largest economy if the bond frenzy goes unchecked. Prices of Chinese bonds have risen fast since early this year as investors pile into them because of the uncertain economic outlook. Businesses are also borrowing less, leaving banks with excess cash they have to park somewhere.
China is trying to end its ‘epic’ property crisis. The hard work is just beginning
“Credit demand is weak due to the property woes. As a result, banks have to buy more bonds as money is trapped in the interbank market,” said Larry Hu, chief China economist for Macquarie Group.
A “deflationary outlook” for the economy has also taken hold among investors, prompting them to flock to long-term sovereign bonds, he added.
Similar to SVB, China’s financial institutions have invested a significant amount in long-term government bonds, which make them vulnerable to sudden interest rate changes.
Beijing is concerned that if the bond bubble pops, sending prices down and yields up, those lenders could suffer big losses.
“What worries policymakers is the interest rate risk, which will rise once the dominant narrative shifts from deflation to reflation,” Hu from Macquarie said.
In the first half of this year, net purchases of sovereign bonds by financial institutions, mostly by regional banks, were 1.55 trillion yuan ($210 billion), up 61% from the same period last year, according to an analysis of central bank data by Zheshang Securities, a state-controlled brokerage firm.
Official interest rates in China are low after cuts in recent years by the PBOC aimed at supporting the economy. Deflationary pressures have persisted — consumer prices rose less than expected in May and factory prices declined for the 20th month in a row.
But “once external demand slows, Beijing will have to step up stimulus to achieve its (economic) growth target,” Hu said.
If that happens, bond yields will rise as investors switch back into riskier stocks. Meanwhile, demand for credit should rise, banks will lend more and therefore reduce their holdings of government debt. This will cause the bond bull market to reverse, Hu said.
The country’s “4,000 or so small and medium-sized banks” will be particularly vulnerable to the interest rate risk, he added.
Official interest rates in China are low after cuts in recent years by the PBOC aimed at supporting the economy. Deflationary pressures have persisted — consumer prices rose less than expected in May and factory prices declined for the 20th month in a row.
But “once external demand slows, Beijing will have to step up stimulus to achieve its (economic) growth target,” Hu said.
If that happens, bond yields will rise as investors switch back into riskier stocks. Meanwhile, demand for credit should rise, banks will lend more and therefore reduce their holdings of government debt. This will cause the bond bull market to reverse, Hu said.
The country’s “4,000 or so small and medium-sized banks” will be particularly vulnerable to the interest rate risk, he added.
Cooling the frenzy
In a sign of growing concerns, the PBOC said Monday it would intervene directly in the bond market to cool the frenzy for “the first time in history,” according to state media.The central bank will borrow government bonds from traders on the open market, so that it can sell them in a bid to depress prices and boost yields.
The decision was made after “careful observation and assessment” and was intended to “maintain the sound operation of the bond market,” the PBOC added.
Chinese state media outlets are also sounding the alarm. The state-owned Securities Times warned Tuesday about the risks of a bond market bubble, calling out the case of SVB and a Japanese bank whose holdings of US and European government debt have lost value as yields have risen.
“The bubble formed by the rush of funds into the bond market is accumulating interest rate risks,” the Securities Times said in an editorial. “The ‘triggers’ for the bankruptcy of SVB and the huge losses of Japan’s Norinchukin Bank were all interest rate risks caused by their over-reliance on bond investment.”
https://www.goodreturns.in/news/gol...ces-24k-100-grams-up-by-rs-7-100-1355445.html
Gold Price In India, July 4: Sharp Jump In Gold Prices, 24K/100 Grams Up By Rs 7,100 By Renu Baliyan Published: Thursday, July 4, 2024, 13:03 [IST]
Gold prices in India today sharp rally after remaining steady on July 3 after softer-than-expected U.S. economic data fuelled prospects that the Federal Reserve could slash interest rates as early as September.
22K gold prices today in India jumped by Rs 650 to Rs 67,000/10 grams and 100 grams of 22 carat yellow metal prices on July 4 zoomed by Rs 6500 to Rs 6,70,000. 24k gold prices today surged by Rs 710 to Rs 73,090/10 grams while 100 grams of 24 carat precious metal prices soared by Rs 7,100 to Rs 7,30,900.
Read more at: https://www.goodreturns.in/news/gol...ces-24k-100-grams-up-by-rs-7-100-1355445.html
Gold Price In India, July 4: Sharp Jump In Gold Prices, 24K/100 Grams Up By Rs 7,100 By Renu Baliyan Published: Thursday, July 4, 2024, 13:03 [IST]
Gold prices in India today sharp rally after remaining steady on July 3 after softer-than-expected U.S. economic data fuelled prospects that the Federal Reserve could slash interest rates as early as September.
22K gold prices today in India jumped by Rs 650 to Rs 67,000/10 grams and 100 grams of 22 carat yellow metal prices on July 4 zoomed by Rs 6500 to Rs 6,70,000. 24k gold prices today surged by Rs 710 to Rs 73,090/10 grams while 100 grams of 24 carat precious metal prices soared by Rs 7,100 to Rs 7,30,900.
Read more at: https://www.goodreturns.in/news/gol...ces-24k-100-grams-up-by-rs-7-100-1355445.html
https://www.google.com/amp/s/amp.sc...ms-dwindle-amid-e-payments-and-cashless-shift
Once abundantly dispersed across China to serve the banking needs of more than a billion people, physical bank branches and ATMs have seen their numbers dwindling as the public embraces e-payment platforms and financial institutions cut costs.
And as most of the public can use their phones to conduct banking and monetary transactions, closures have gradually outpaced new installations.
In the first half of this year, 1,126 bank branches closed while just 968 new ones were approved, the Shanghai-based news media Cailian Press reported on Monday, citing figures from the National Financial Regulatory Administration.
That is compared with the January to June period last year, it said, when 1,600 bank branches shuttered while 850 were established.
China’s bank branches, ATMs dwindle amid e-payments and cashless shift
- Banks cut costs by employing fewer branch workers and embracing digital, so when cash is needed it can be harder to come by
Once abundantly dispersed across China to serve the banking needs of more than a billion people, physical bank branches and ATMs have seen their numbers dwindling as the public embraces e-payment platforms and financial institutions cut costs.
And as most of the public can use their phones to conduct banking and monetary transactions, closures have gradually outpaced new installations.
In the first half of this year, 1,126 bank branches closed while just 968 new ones were approved, the Shanghai-based news media Cailian Press reported on Monday, citing figures from the National Financial Regulatory Administration.
That is compared with the January to June period last year, it said, when 1,600 bank branches shuttered while 850 were established.
https://www.bloomberg.com/news/arti...party-is-reshaping-chinese-investment-banking
The China World Office 2 building, which houses the headquarters of China International Capital Corp. (CICC), in Beijing, China.
Photography: Bloomberg
By Yang Yang, Naomi Ng, Jessica Beck, Adriana Tapia Zafra, and David Gura
July 3, 2024 at 4:29 AM GMT+8
Updated on
July 3, 2024 at 11:17 AM GMT+8
Save
Listen and follow The Big Take Asia on Apple Podcasts, Spotify or wherever you get your podcasts.
One after another, bankers at China International Capital Corp. — China’s premier investment bank – are pledging loyalty to the Communist Party, underscoring a new reality for Wall Street-style capitalists in the era of Xi Jinping.
Have a confidential tip for our reporters
China’s Oldest Investment Bank Is Being Reshaped by Communism
China’s bankers are pledging allegiance to the Communist Party and learning to live without Wall Street pay packages. Find out why on the Big Take Asia podcast.
The China World Office 2 building, which houses the headquarters of China International Capital Corp. (CICC), in Beijing, China.
Photography: Bloomberg
By Yang Yang, Naomi Ng, Jessica Beck, Adriana Tapia Zafra, and David Gura
July 3, 2024 at 4:29 AM GMT+8
Updated on
July 3, 2024 at 11:17 AM GMT+8
Save
Listen and follow The Big Take Asia on Apple Podcasts, Spotify or wherever you get your podcasts.
One after another, bankers at China International Capital Corp. — China’s premier investment bank – are pledging loyalty to the Communist Party, underscoring a new reality for Wall Street-style capitalists in the era of Xi Jinping.
Have a confidential tip for our reporters
Not for us wan....
THis could be a trigger signal for something even Huat Bigger Bigger
50yrs CCP Bond Hookay...2.5% Yield
https://www.thaibma.or.th/EN/Market/YieldCurve/Government.aspx
Moi love the mature date until 2072 wan
Japan Revamps Banknotes in Move That May Unleash Mattress Cash
Sheets of newly-designed Japanese 10,000 yen banknotes.Photographer: Kiyoshi Ota/Bloomberg
By Erica Yokoyama
July 3, 2024 at 7:30 AM GMT+8
Updated on
July 3, 2024 at 11:54 AM GMT+8
Japan issued newly designed banknotes for the first time since 2004 in a move that may provide a small boost to the economy while potentially nudging some cash hoarders to invest money instead of stashing it under the mattress.
The Bank of Japan shipped the first bundle of newly designed notes on Wednesday. The new ¥10,000 bills ($62) feature a portrait of Eiichi Shibusawa, seen as the father of Japanese capitalism.
Have a confidential tip for our
https://www.straitstimes.com/business/dbs-boosts-digital-asset-push-with-first-stablecoin-tie-up
SINGAPORE - Singapore’s largest bank DBS Group Holdings will for the first time provide custody for stablecoin reserves and offer related cash management services, in a tie-up with the local unit of US-based cryptocurrency issuer Paxos Trust.
The lender said the development deepens its wide-ranging involvement in the digital-asset ecosystem, making the announcement after Paxos’ operation in the city-state received a licence from the Monetary Authority of Singapore.
“We look forward to partnering leading stablecoin issuers for their cash management and reserve custody needs if they meet the regulatory requirements,” Ms Evy Theunis, head of digital assets at the institutional banking group at DBS, said in e-mailed responses to questions on July 2.
SINGAPORE - Singapore’s largest bank DBS Group Holdings will for the first time provide custody for stablecoin reserves and offer related cash management services, in a tie-up with the local unit of US-based cryptocurrency issuer Paxos Trust.
The lender said the development deepens its wide-ranging involvement in the digital-asset ecosystem, making the announcement after Paxos’ operation in the city-state received a licence from the Monetary Authority of Singapore.
“We look forward to partnering leading stablecoin issuers for their cash management and reserve custody needs if they meet the regulatory requirements,” Ms Evy Theunis, head of digital assets at the institutional banking group at DBS, said in e-mailed responses to questions on July 2.
Lemember doing business with CCP China is not as straight forward. The foreigner and banks who are still holding on to the bond of evergrande holding of china
he following are some points related to foreign bondholders of Evergrande ¹ ²:
- In 2021, Evergrande stopped making interest payments to overseas investors, signaling issues with China's property model.
- Since then, there have been no deals with creditors, with a two-year restructuring negotiation amounting to nothing.
- Evergrande had over $20 billion of offshore bond debt in issue, held by investors like BlackRock, HSBC, and Ashmore.
- The crisis has left China with Rmb30tn of unsold housing.
- The Hong Kong High Court ordered the liquidation of Evergrande NEV, the financial arm of its parent company, in January.
Below are the news information :
https://www.ft.com/content/4a3cb4ac-8f75-45d5-ba70-66199baebcc3
Don't be such a asshole to buy into foreign bonds, issued by Chinese Govt. I recommend our capital trust to tread with fear and extreme caution.
If these rich traditional banks with thick capital can be stuck with so much money in China, don't think our GLC can do anything better.
he following are some points related to foreign bondholders of Evergrande ¹ ²:
- In 2021, Evergrande stopped making interest payments to overseas investors, signaling issues with China's property model.
- Since then, there have been no deals with creditors, with a two-year restructuring negotiation amounting to nothing.
- Evergrande had over $20 billion of offshore bond debt in issue, held by investors like BlackRock, HSBC, and Ashmore.
- The crisis has left China with Rmb30tn of unsold housing.
- The Hong Kong High Court ordered the liquidation of Evergrande NEV, the financial arm of its parent company, in January.
Below are the news information :
https://www.ft.com/content/4a3cb4ac-8f75-45d5-ba70-66199baebcc3
Don't be such a asshole to buy into foreign bonds, issued by Chinese Govt. I recommend our capital trust to tread with fear and extreme caution.
If these rich traditional banks with thick capital can be stuck with so much money in China, don't think our GLC can do anything better.
The bigger silent killer are Global REIT that invested 103b USD in Tiongkok Commerical Bulding and warehouse to sirpok Tiongkok Supply Chain not too long ago
Maybe that ish why our TanWahTiu machiam like disappear from Planet Earth..no sound no pic
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