Short Sellers May Be Fueling China's Worst Bond Rout in Four Years
- Practice creates a vicious feedback loop: Huachuang Securities
- Rise in bond borrowing shows more cash bond shorting, ANZ says
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Short sellers may be aggravating China’s biggest bond selloff in four years.
While the nation’s debt market has no official measure of short sales, analysts say a surge in bond lending has been partially fueled by rising bearish bets. A record 1.82 trillion yuan ($274 billion) of notes has been lent out this year, 18 percent more than the total for all of last year, according to clearinghouse ChinaBond. Short sellers profit from falling bond values by selling borrowed notes and buying them back after prices fall.