Onshore trading volume dropped, offshore increased
Offshore trading volumes started to increase in January
Offshore trading volume of China issuers (in millions of dollars)
Onshore trading volumes continue falling Onshore trading volume fell 14% sequentially in January to about $840 million (converted as of issue date), the lowest since February 2021. Investment grade bonds comprised 92%. Onshore trading volumes have yet to recover from the Evergrande aftermath.
Onshore trading volume of China issuers (in millions of dollars)
Source: Bloomberg Quant Platform (BQuant), Global Data
Bond yield and index change Domestic bonds were immune to recent real estate contagion as the bond universe's average option-adjusted spreads (OAS) for fixed-rate medium-term notes stayed flat for all rating buckets and sectors. The medium-term notes of AA+ rated issuer JuneYao Group, which owns a majority stake in Juneyao Airlines, continued to suffer due to the Covid-19 resurgence in China. The issuer's 5.8% 2023 maturity (CND100036GS0) traded at a distressed price below 80 cents on the dollar as of end-January.
Use FIW@CN to see the yield change based on local ratings and issuers of China's domestic bonds by sector.
Distressed non-investment grade property bond amount outstanding
Source: FIW@CN , Bloomberg Intelligence
