April 9, 2018 / 7:10 AM / a year ago

Foreigners raise China bond holdings for 13th month in March to record high

SHANGHAI, April 9 (Reuters) - Foreign investors raised their holdings of Chinese bonds in March for a 13th consecutive month, boosting the proportion of Chinese bonds held by offshore institutions to an all-time high.

Offshore holdings of all Chinese bonds in the interbank market rose by 28.2 billion yuan to 1.3 trillion yuan ($206.45 billion) in March, according to Reuters’ calculations based on data from Shanghai Clearing House and China Central Depository and Clearing Co (CCDC), the country’s primary bond clearing houses.

The purchases brought the proportion of outstanding Chinese interbank market bonds held by offshore institutions to 1.96 percent, a small fraction of the total market but the highest percentage to date.

Offshore holdings of Chinese bonds were nearly 67 percent higher in March than a year earlier, the data showed. The increase has been primarily driven by purchases of Chinese treasury bonds.

Overseas investors’ holdings of Chinese treasury bonds rose by 21.2 billion yuan in March, or 3.1 percent, to 712.1 billion yuan. That represents 5.85 percent of outstanding government bonds, also the highest proportion to date.

In March, Bloomberg announced that the Bloomberg Barclays Global Aggregate Index will begin to include Chinese yuan-denominated government and policy bank securities in April next year. The inclusion will be phased in over a 20-month period.

$1 = 6.2970 Chinese yuan Reporting by Andrew Galbraith; Editing by Kim Coghill

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