Fullerton Fund Management’s Post

China’s Back in the Dollar Market — $4B Sovereign Bond Sale to Anchor Offshore Yield Curve ✨ Key Highlights & Market Takeaways: 🟢 China’s Ministry of Finance will issue up to $4 billion in USD-denominated bonds in Hong Kong on Nov 3, marking its first dollar sale since 2021. 🔵 The move is designed to establish a stronger offshore yield curve, giving global investors clearer pricing signals on Chinese credit. 🟣 This issuance could set benchmark rates for Chinese corporates looking to tap overseas dollar funding. 🟠 Strategically, it reinforces Hong Kong’s pivotal role as China’s international financial bridge — connecting mainland issuers with global capital markets. 🟡 As Alpha Binwani Capital notes: “This helps benchmark Chinese corporate dollar bond issuance rates, and supports Hong Kong’s role as a bridge between China and the world.” 💬 A confident signal from Beijing — and a potential tailwind for China credit curves and Hong Kong’s financial hub status alike. #ChinaBonds #FixedIncome #EmergingMarkets #HongKongFinance #GlobalMarkets #InvestmentStrategy #AlphaBinwaniCapital #SovereignDebt #YieldCurve

Today’s China Top Five: 💡 𝗙𝗶𝘃𝗲-𝗬𝗲𝗮𝗿 𝗣𝗹𝗮𝗻 | 𝗖𝗦𝗥𝗖 CSRC Chairman Wu Qing convened a special meeting in Beijing to discuss the “15th Five-Year Plan” for capital market development. Key proposals include deepening IPO reforms, expanding A-share index investing, developing top-tier investment banks and fund houses, and enhancing cross-border investment facilitation. 💡 𝗠𝗮𝗿𝗸𝗲𝘁 𝗢𝗽𝗲𝗻𝗶𝗻𝗴 | 𝗕𝗼𝗻𝗱 𝗥𝗲𝗽𝗼 PBoC, CSRC, and SAFE jointly issued a notice to allow all types of foreign institutional investors to conduct repo transactions in China’s bond market. All foreign institutional investors in the interbank bond market – whether through direct access or Bond Connect – are now eligible. 💡 𝗠𝘂𝘁𝘂𝗮𝗹 𝗙𝘂𝗻𝗱𝘀 | 𝗡𝗲𝘄 𝗜𝘀𝘀𝘂𝗮𝗻𝗰𝗲 In the first three quarters of 2025, over 1,100 new mutual funds were launched – nearly matching the full-year total for 2024 – reflecting renewed enthusiasm across the public fund industry as equity sentiment strengthens. Of the 1,138 new funds launched as of end-September, 823 were equity-focused (over 70%). 💡 𝗕𝗮𝗻𝗸 𝗪𝗲𝗮𝗹𝘁𝗵 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 | 𝗔𝗨𝗠 Outstanding BWMP assets rose from RMB30.26tr at end-June to RMB30.95tr in August, before dipping RMB152bn in September to close the quarter at RMB30.79tr. The September decline was driven by quarter-end deposit assessments and investor redemptions amid a strong equity market. 💡 𝗘𝘅𝗽𝗼𝗿𝘁 𝗖𝗼𝗻𝘁𝗿𝗼𝗹𝘀 | 𝗥𝗮𝗿𝗲 𝗘𝗮𝗿𝘁𝗵𝘀 Ministry of Commerce announced new export control measures on certain rare earth–related technologies and materials. Foreign entities exporting Chinese-origin items or technologies must obtain a dual-use export license. #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

Hong Kong is reinforcing its position as the world’s largest offshore yuan hub, accounting for 76% of global offshore yuan payments in August. The Hong Kong Monetary Authority recently launched a 100 billion yuan Renminbi Business Facility, allowing businesses to borrow yuan at onshore interest rates, significantly reducing costs and exchange rate risks. This initiative is part of a broader strategy to create a robust ecosystem for yuan-based investment, financing, and hedging. Measures include expanding the scheme to support overseas investments, launching a cross-boundary bond repo arrangement, and increasing yuan liquidity through institutional participation. These reforms aim to narrow the pricing gap between onshore and offshore yuan and attract global investors to yuan-denominated assets like dim sum bonds. Hong Kong’s efforts are also driven by a shift in global investor sentiment away from US dollar assets, with growing interest in Chinese currency and markets. The city’s financial infrastructure is evolving to support this demand, including plans for a central clearing agency and integration with global custodians like Euroclear and Clearstream. Source: South China Morning Post #YuanInternationalisation #HongKongFinance #OffshoreRMB #DimSumBonds #BondConnect #HKMA #ChinaFinance #CurrencyMarkets #TradeFinance #GreaterBayArea

China Opens Bond Repo Market Wider to Foreign Investors in Push for Global Integration  China on Thursday opened wider doors to its $21 trillion bond market, granting foreign investors full access to repurchase transactions in a move regulators said will align the country more closely with global standards and deepen liquidity. In a joint notice, the People’s Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange said all qualified foreign institutions — including those trading through the Bond Connect link — may now take part in repos, a key short-term financing tool in global debt markets. https://lnkd.in/deQBuSy3

With global capital markets evolving, Chinese issuers are turning to the US$1.5 trillion Eurobond market to expand their international footprint. Read Valerie and Philippe's recent interview with South China Morning Post. https://lnkd.in/g37BPtz7

Today’s China Top Five: 💡 𝗤𝗗𝗜𝗜 | 𝗕𝗹𝗮𝗰𝗸𝗥𝗼𝗰𝗸 BlackRock (China) applied for a QDII license on October 16, seeking approval to sell strategies investing in offshore asset. If approved, BlackRock would be the first global manager to obtain a QDII license through a greenfield wholly owned fund management unit.   💡 𝗖𝗵𝗶𝗻𝗮 𝗘𝗧𝗙𝘀 | 𝗢𝘂𝘁𝗳𝗹𝗼𝘄𝘀 China-focused ETFs saw outflows for a second straight week as trade tensions between the US and China weighed on sentiment. The Xtrackers Harvest CSI 300 China A-Shares ETF led withdrawals with USD391m in outflows, its largest since April. 💡 𝗙𝗶𝘀𝗰𝗮𝗹 𝗕𝘂𝗱𝗴𝗲𝘁 | 𝗠𝗼𝗙 Ministry of Finance will continue early allocation of 2026 local debt quotas, supporting project construction, resolving hidden debt, and settling government arrears to maintain stable local fiscal operations. RMB500bn in new policy financial tools are also moving from policy design to actual implementation.   💡 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁𝘀 | 𝗖𝗗𝗕 & 𝗔𝗗𝗕𝗖 Policy banks China Development Bank and Agricultural Development Bank of China have injected nearly RMB300bn into strategic investment projects over the past two weeks. The funding is part of a RMB500bn government-backed initiative designed to stimulate economic growth. 💡 𝗨𝗦-𝗖𝗵𝗶𝗻𝗮 | 𝗗𝗲𝗮𝗹 𝗘𝘅𝗽𝗲𝗰𝘁𝗮𝘁𝗶𝗼𝗻𝘀 US President Donald Trump said he expects to reach a fair trade deal with Chinese President Xi Jinping, while downplaying the likelihood of conflict over Taiwan. When asked if the US might adjust its stance on Taiwan independence as part of trade negotiations, Trump declined to comment but said it may come up in talks. #chinatopfive #zbenadvisors #assetmanagement #mutualfunds #ETFs #china #financialnews

Asia: Cat bonds and credit lead Asia's alternatives charge, China's markets shed 'uninvestable' tag as global funds return: Cat bonds and credit lead Asia's alternatives charge From Asian Investor: Asia-Pacific's institution... http://dlvr.it/TNM1lh #AlternativeInvestments

Asia: Cat bonds and credit lead Asia's alternatives charge, China's markets shed 'uninvestable' tag as global funds return: Cat bonds and credit lead Asia's alternatives charge From Asian Investor: Asia-Pacific's institution... http://dlvr.it/TNM1kV #HedgeFunds #AlternativeInvestments

China has opened its market for exchange-traded fund (ETF) options to qualified foreign investors, the latest step in efforts to attract overseas capital and increase the appeal of yuan-denominated assets. #China https://lnkd.in/dBCSycKu

Asia portfolio manager Stephen Chang and credit strategist Jingjing Huang, CFA discuss what recent China tech bond deals may signal for credit markets. https://pim.co/fs34l1fa #PIMCOAPACInsights #China #investing