Dim Sum bonds — yuan-denominated debt securities issued in Hong Kong — remain an attractive investment tool this year after yielding 6.65 percent last year, underpinned by interest income and yuan appreciations, HSBC Global Asset Management Taiwan said yesterday.
Dim Sum bond issuance may reach between 520 billion yuan (US$86.32 billion) and 560 billion yuan this year, rising 48.57 percent from the amount issued last year on the back of strong demand, HSBC Global Asset Management assistant vice president Steven Huang (黃軍儒) said.
“Dim Sum bonds proved a good fixed-income product last year, despite reports of liquidity crunch and other unfavorable twists,” Huang told a media briefing.
The US Federal Reserve’s tapering of its debt purchases could have a very limited impact on Dim Sum bonds given their relatively short tenure and China’s support for the development of offshore yuan markets, Huang said.
As of November last year, offshore yuan deposits approximated 1.1 trillion yuan worldwide, with Hong Kong accounting for 71 percent, followed by Singapore at 13 percent and Taiwan at 11 percent, he said.
Huang said many companies plan to issue Dim Sum bonds to meet business needs and capitalize on gradual, but steady yuan appreciations.