Singapore can lead way into China's bond opportunity

WITH some markets in a negative interest rate environment amid an uncertain global economy, investors are casting their nets wide in search of ever-elusive yields.

One asset class gaining significant investor interest is China's US$9 trillion bond market, the world's third largest. Still, of the US$5 trillion in outstanding bond issues, only 3 per cent of onshore bonds are currently owned by foreigners.

Beijing has been keen to tackle this ownership asymmetry as it continues to introduce a broad swathe of structural reforms across asset classes to open up its capital markets. This includes measures aimed specifically at its onshore bond market, which today remains substantially larger than its offshore market.