Americans snub China's new Dollar bond amid trade tensions

(Oct 15): China’s latest dollar-bond sale saw a marked slump in buying by US-based investors compared with last year’s offering, a stark contrast that’s emerged as bilateral trade tensions escalate.

Diminished demand from the US contributed to a slide in the bid ratio for the US$3 billion ($4.13 billion) sale last week, which was held during a bout of global market volatility. Orders amounted to 4.4 times total issuance, compared with about 10.5 times in last year’s US$2 billion offering. With China’s economy slowing, recent moves by policy makers to shore up the expansion might also have dulled overseas appetite, said Anthony Leung at Wells Fargo & Co.

“US investors may want to stay on the sidelines as China’s easing measures tend to be perceived by them as ‘the country is bracing for a hard time ahead,’” said Leung, a senior analyst at Wells Fargo in Hong Kong. More broadly, “it’s probably not surprising to see US demand has declined this time amid trade war and hacking concerns,” he said.

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