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Killing five birds with one stone

Market Commentary

13 May 2015

China’s domestic markets are undergoing huge transformation, a key area being the local bond market where the RMB swap program ‘kills five birds with one stone’

One of the most exciting developments in China today is taking place in the local bond market. The much-discussed RMB 1trn swap of local government debt into municipal bonds is likely to be the start of a multi-year program, which should eventually see most of China’s RMB 11trn local government debt universe converted into fully tradable securities. This means that China’s muni bond market could eventually grow as large as the entire dollar denominated Emerging Markets (EM) corporate bond market. It will also have five positive effects. The full article is available on the link below.

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