Home Capital Broker's Calls

Why buy a Developed Market government bond when you can get a Chinese one instead?

Ng Qi Siang
Ng Qi Siang10/12/2020 04:14 PM GMT+08  • 5 min read
Why buy a Developed Market government  bond when you can get a Chinese one instead?
A DBS team have found that Chinese Government Bonds are starting to behave like hedges under financial stress.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

In these troubled times, every investor needs a good hedge against financial uncertainty in their portfolio. While such bulwarks are typically sought in Developed Market government bonds, a team of DBS strategists led by Eugene Leow are placing their bets on Beijing.

“It is high time to recognise that China government bonds (CGB) are a viable alternative to other DM govvies,” they declare bullishly, citing their potential as a hedging asset in an Oct 12 broker’s report. Hedges offsetting losses made in investment positions when prices fall, reducing the overall risk of an investor’s portfolio.

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.