LGFVs push Asian bond markets down another leg

As China's deleveraging efforts continue to reverberate through Asian bond markets, with Local Government Financing Vehicles in the spotlight, how deep will the re-pricing will be?
Xining, Qinghai Province
Xining, Qinghai Province

Any hopes that the international bond market in Asia might stabilise in June proved wide of the mark as primary and secondary market conditions both progressed from bad to worse during the month.

Ending the quarter on a sour note, the tough trading climate was described in stark terms by some in the market.

“This is a market that could completely shut down due to unstable pricing,” Jim Veneau, head of Asian fixed income at AXA IM, said. “Only the most resolute, the most focused, or the most desperate are accessing the market right now.”

That latter group includes China’s Local Government Financing...

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