Fidelity’s Recommendations
Fidelity Worldwide Investment manager Bryan Collins said that yuan-denominated bonds are one of the assets that will not be affected by a coming U.S. interest rate hike. He added that bond maturity is relatively short, and thus they are less vulnerable to a rise in interest rates.
“The Chinese currency is less volatile than most of the others, and it can help asset distribution in investors’ portfolios,” he mentioned at the China Stock and Bond Expert Meeting held in Seoul on Feb. 26. He continued, “This is why institutional investors and central banks prefer the Chinese yuan. It is likely to become more and more attractive with the People’s Bank of China signing swaps with more than 28 global banks, and China’s international trade volume on the rise.”
Investment Director Catherine Yeung also said that the recent drop in oil prices gave the bank more room for expansionary policy. “China, based on aggressive infrastructure investment, has significantly increased its crude oil production and is currently using this to expand the extra supply of crude oil,” she mentioned, advising, “At the same time, we need to pay attention to the e-commerce market of China in view of its wide territory.”
According to her, the daily sales of Alibaba amounted to US$9.6 billion on Nov. 11 last year, a so-called single day, and the amount is close to the annual sales of Apple for 2013.