Investors Buying 10-year CGBs Ahead Of Expected February Rate Cut

Onshore and offshore investors continue to increase holdings of China Government Bonds amid rising expectations for loosening monetary policy, 21st Century Business Herald reported citing market insiders. A possible interest rate cut by the People’s Bank of China in February has fuelled the market’s enthusiasm for 10-year CGBs, which has also attracted investors concerned about fluctuations in the stock market during the Spring Festival. A large influx of funds has pushed up bond prices with the 10-year treasury yield hitting its lowest level since June 2002 at 2.455% on Tuesday. There may be limited room for further price increases with the yield falling below 2.5%, said a head of a private equity firm.