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Information fog stirs fund manager anxiety

Information fog stirs fund manager anxiety

(22 November 2018 – Asia) One of the key findings from FinanceAsia’s inaugural Bond Connect survey 2018 is that fund managers are hampered by a lack of information. With macro-economic concerns persisting, investment is likely to be muted.

It’s more than a year since mainland China launched Bond Connect, opening up onshore investment opportunities by foreign investors. In today’s rapidly moving, interconnected world, it’s surprising that many of fund managers who participated in FinanceAsia’s Bond Connect survey, still feel, that , in spite of the nation’s ongoing efforts to improve the scheme’s efficiency and usability, they aren’t getting the whole picture about the market, due to limited local research and information

For East and Partners Asia’s lead analyst Sangiita Yoong, this lack of information will remain a drag on Bond Connect’s success and access. “There’s definitely not enough information available. Around 76% of global investors surveyed by East and Partners say they do not have enough information. Yes, they are interested in investing onshore but they say they need more data. Until you combine better information and address other issues, they will remain twin headwinds.”

Yoong believes China bonds inclusion in the key benchmark Bloomberg-Barclays Global Aggregate Index in 2019 will certainly go some way to alleviating foreign investor anxiety particularly in relations to ratings. It’s also anticipated that the move will help to encourage the acceleration of investment or holdings in China’s onshore bond market. FinanceAsia’s respondents overwhelming suggested that an improvement in the nation’s macro economic outlook would essentially convince them to accelerate acquisition or increase their holdings.

The prospect of risk-adjusted returns becoming more attractive, further de-leveraging and a macro economic outlook uptick would all serve to further encourage investment in Bond Connect.

To learn more about investors’ apprehension to Bond Connect and the in-depth research conducted by FinanceAsia’s research partner East & Partners Asia, please contact Keith Frith (keith.frith@haymarket.asia), commercial director for more information.

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