Onshore bond trading volume in China surged in July, making Deutsche Bank the top foreign bank by trading volume for China’s Bond Connect scheme.
Bond Connect is China’s mechanism for enabling foreign investors to access China’s 13 trillion US dollar onshore bond market – the world’s third largest.
In July, offshore institutions net purchased bonds for 8.84 billion US dollars (equivalent to 62 billion renminbi). Foreign investors now hold 2.25 percent of onshore bonds.
Jerry Li, Head of Greater China Local Markets, said: “We have actively marketed the China onshore bond market to foreign institutional investors, promoting this year’s global index inclusion and our onshore capabilities to help global investors access this enormous market.”
“Ranking No. 1 for onshore bond trading volumes shows we have achieved significant momentum in renminbi markets, which we will continue to build on,” Li added.
Since the Bond Connect scheme was launched two years ago, more and more foreign investors are joining. In July, 96 new accounts were added, taking the total number of foreign institutional investors to 1,134 by the end of the month.
“We expect foreign inflows into renminbi-denominated bonds to continue to rise in the coming months on the back of further renminbi bond index inclusion decisions and continued opening up measurements. Our analysts forecast an additional 120 billion US dollars to flow into onshore bonds in the next few years,” Li concluded.