Dim Sum sales freeze amid yuan concerns

Hong Kong

HONG Kong's yuan bond market has ground to a halt as even average yields of almost 6 per cent can't allay global investor concerns over a weakening Chinese currency.

There have been no sales of Dim Sum debt maturing in more than a year since Aug 21, when Credit Agricole CIB raised 800 million yuan (S$177.6 million), according to data compiled by Bloomberg.

The average yield on the securities has jumped 160 basis points since an Aug 11 yuan devaluation to touch a record 5.97 per cent on Sept 7, a Deutsche Bank AG index shows.

"The appetite for yuan-related instruments, including Dim Sum bonds, hasn't fully recovered after the devaluation," said Gordon Ip, a Hong Kong-based senior fund manager at Value Partners Group Ltd, which oversaw US$16.5 billion of assets at the end of July. "…