Chinese Insurance Co.s Cut Us$2.34bln From Ent. Bonds In August

Chinese insurance institutions continued to slash enterprise bonds by a total of 14.937 billion yuan (US$2.34 billion) in August, after a large cut of enterprise bonds in July.

In last month, insurance firms accumulatively reduced their bond holdings by 25.164 billion yuan, with 60 per cent of which were enterprise bonds. Insurance institutions became the main drive of short-selling on enterprise bonds in August.

After the default event on a Yunnan urban financing vehicle bond, a large number of urban financing vehicles' debts have been impacted significantly. According to publicized data, near 300 of the entire 500 urban financing vehicle bonds recessed after the event in August.

"Up to now, we can't say that the default risks in urban financing vehicles' bonds were ruled out, thus investors shall be cautious in their future debenture debt investment", said analysts.

However, some speculative investors have a strong appetite to invest in credit debts because of continually spiking yields of debenture debts at present.