Okay, so I’ve been digging into this whole “dim sum bond” versus “panda bond” thing, and let me tell you, it’s been a ride. I thought I’d share my little journey here, might save someone else a headache later on.
I started out just trying to figure out what the heck these bonds were all about. Seemed simple enough, right? Bonds issued in Chinese currency, but in different places. That’s where the fun began.
First, I dove into dim sum bonds. These are the ones issued in Hong Kong. I read a bunch of stuff about how they’re issued outside of mainland China and how they’re good for those who want to deal in renminbi without being directly in the Chinese market.
- I learned that “dim sum” is just a slang term, makes sense, given they’re from Hong Kong.
- Also found out they tend to have higher yields, which is always a plus.
Next up, panda bonds. These bad boys are issued right inside China. I stumbled upon this Deutsche Bank thing, where they issued their own panda bond this year. Pretty big deal, I guess.
- Discovered they’re a way for companies to fund their operations in China without dealing with currency exchange risks.
- Read somewhere that they usually have lower yields compared to dim sum bonds.
So, I started comparing the two. I was bouncing between articles and reports, trying to piece it all together. Figured out the main difference is where they’re issued and the rules around them. Dim sum bonds are like the offshore cousins, while panda bonds are right there in the thick of it in mainland China.
I even found this tidbit about panda bonds being around since 2005 and how they’re getting more popular. Apparently, this year is going to be a big one for them. Last year in 2023, I read somewhere that there were 94 bonds issued, raising a record RMB154. 5 billion.
What really got me was how these bonds are seen as a “safe” asset. Something about China trying to manage its inflation while the rest of the world is struggling. Made me think about how they could be a good way to diversify an investment portfolio.
Anyway, that’s my little adventure into the world of dim sum and panda bonds. I realized it’s not as simple as it first seemed, but it’s definitely interesting. Hope this helps someone out there!