China housing frenzy spurs fund managers to favour property bonds

Shanghai

THE home-buying frenzy in Shanghai and Shenzhen is spurring China's fund managers to load up on property bonds.

Yuan-denominated real estate notes returned 2 per cent this year, third only to electric and oil service companies among Chinese corporate securities, according to Bloomberg analysis of a Bank of America Merrill Lynch index. In a sign of confidence, Poly Real Estate Group Co sold five-year notes at 2.96 per cent on Feb 23, eight basis points lower than the rate for debt issued by China Development Bank Corp, the nation's biggest policy lender.