Just 3% of a huge China US dollar bond bought by non-Asians

Hong Kong

THE biggest US dollar bond to come out of China in three years demonstrated the dominance of local demand in Asia's booming offshore debt market, with just 3 per cent of purchases coming from outside the region.

Growth in the pool of liquidity in Asia has enabled record issuance of US$221 billion of US dollar bonds so far this year in the region excluding Japan, more than 20 per cent greater than what was sold in all of 2016, according to data compiled by Bloomberg. Some estimates showed that the size of the market is already approaching US$1 trillion, while others anticipated that this milestone will be hit within the next three years.

Given that context, it was perhaps no surprise that Postal Savings Bank of China Co found smooth sailing for its US$7.25 billion sale of additional tier-one securities last week, priced just hours after China's sovereign rating was cut. The largest such sale since an Alibaba Group Holding Ltd issue in 2014, some 70 per cent was bought by Chinese buyers…