A leading sovereign wealth fund from Central Asia has cast a vote of confidence in Chinese debt and the country’s currency by becoming the first institution from the region to sell yuan-denominated debt, known as
panda bonds, in China’s onshore market.
The decision by Kazakhstan’s sovereign wealth fund, Samruk-Kazyna, to sell 3 billion yuan (US$440 million) in China’s interbank market comes as global investors are looking for safe havens amid geopolitical uncertainties such as the Iran war.
The three-year bond was priced at a “record-low” annual yield of 2.18 per cent, the fund said in a news release issued on Monday, noting that reflected the high level of confidence among Chinese institutional investors.
Samruk-Kazyna, which managed an estimated US$88 billion in assets at the end of last year, is Kazakhstan’s largest state-owned asset management institution.
“This is an important step in our integration into global capital markets – our first entry into China’s domestic market,” the fund’s chairman, Nurlan Zhakupov, said at the listing ceremony at the Astana International Exchange.
He said the issuance “marked an important milestone in strengthening the strategic partnership between Kazakhstan and China”.
Samruk-Kazyna is ranked as the world’s 25th-largest sovereign wealth fund by the Sovereign Wealth Fund Institute.
China is seeking to attract global capital, with the National Development and Reform Commission, the country’s top economic planner, calling for the “attraction and utilisation” of global sovereign wealth funds in its annual report released last month.
Bank of China, which served as a lead underwriter, hailed the issuance as a major achievement in high-level, mutually beneficial cooperation between China and Kazakhstan. “It serves as an important example of deepening collaboration within the framework of the Belt and Road Initiative,” the state-owned bank said.