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Strategies & Market Trends : Greater China Stocks

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From: Julius Wong	10/14/2010 8:05:49 AM
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Yuan Bond Sales Climb to Record Led by Railways: China Credit By Shelley Smith Oct. 14 (Bloomberg) -- China’s plans to lay twice as much high-speed track as the rest of the world combined is turning 2010 into a record year for yuan bond sales. The rail ministry will issue 20 billion yuan ($3 billion) in 10- and 15-year notes today, pushing non-sovereign sales to 312 billion yuan this year, up from 307 billion yuan in the same period of 2009 and the most since Bloomberg began compiling the data in 1999. The ministry’s new bonds due in October 2025 were priced to yield 4.1 percent, or 90 basis points less than similar-maturity debt sold in September 2009, the data show. Government restrictions on bank loans to cool inflation in an economy growing four times faster than the U.S. are increasing the funds banks have available to buy bonds, driving down costs for financing projects. China is spending about $300 billion to build a high-speed network of at least 18,000 kilometers (11,185 miles) by 2020. By contrast, President Barack Obama’s $50 billion program to repair “crumbling” U.S. transport networks awaits Congressional approval. “An up-and-coming China investing in greenfield projects related to its economic build-out starkly contrasts with a mature U.S. economy where infrastructure spending has been neglected,” Tim Condon, the Singapore-based head of Asia research for ING Groep NV, said in an interview yesterday. “The railway sector is a particularly stunning example of this contrast.” Read more noir.bloomberg.com

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