Considering fairly attractive yields and stable interbank liquidity, analysts at Nomura are positive on China's fixed income instruments in the medium term. Albert Leung and Prashant Pande of Nomura said in their March 23 research note titled “China rates: Thoughts and trade ideas” that they believe CNH liquidity will stay flush as the CNH deposit base stabilized near CNH 850 billion in January.
Surge in corporate bond issue in China
Leung and Pande point out that there are several reasons to be positive on CGBs in the medium term. Some of the factors aiding their positive view include: monetary easing expectations remain intact given the structural growth headwinds; interbank liquidity is now much more stable than in the past; and yields are...
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