Bonds find favor as hedging strategy

The rising interest in Chinese bonds among overseas institutions reflects the asset's value in hedging risk and, more importantly, investor confidence in the nation's economic recovery, experts said on Thursday.

According to the People's Bank of China, the country's central bank, net purchases of Chinese bonds by foreign institutional investors exceeded 200 billion yuan ($28 billion) in October, the ninth consecutive month of such net capital inflow this year.

Foreign institutions' net purchases of Chinese bonds have exceeded 1 trillion yuan so far this year, with their increased holdings estimated to have touched 250 billion yuan in November. They have sped up investments in Chinese bonds in the third quarter, PBOC said.