Introduction

Contents

1. BI research: Contrarian positioning may start to form in China property space

2: Credit risk analysis: China dollar-bond default hit 5.7% and could edge up higher

3. China's secondary bond market: Offshore trading volume up 43%

4. China primary bond market: China onshore and ESG bonds trend up

5. Appendix: Key functions and BI reports

6. Additional charts: Distressed securities and subscription trends

*Disclaimer

In our latest edition of the China Market Insights, we share our view that contrarian positioning may start to form in the China property space. Our analysis shows China's offshore dollar-bond default rate hit 5.7% in June and could reach 7.2% in July in our worst-case scenario as dollar-bond issuers face a $14.1 billion maturity wall. We see signs of increasing primary and secondary market activity as onshore issuance climbed 60% and offshore trading volume rose 43% in June compared with the previous month. Country Garden, the country's largest developer, was downgraded to a junk in June. Refer to our appendix for our view on how Country Garden's junk rating could attract more investors and to view other relevant BI reports.

John Lee
Regional Market Analyst
Bloomberg Intelligence

---