China primary bond funds banned from IPO investing
Primary bond funds will no longer be able to boost returns by subscribing to IPOs, effectively forcing them to breach the contracts they have agreed with investors.
The Securities Association of China (SAC) on Friday banned primary bond funds from subscribing to equity initial public offerings, a method long used by asset managers to boost returns.
There are three categories of bond funds in China. Pure bond funds only invest in fixed income; primary bond funds could previously also invest in newly issued stocks; and secondary bond funds can invest in fixed income as well as stocks in the primary and secondary markets.
As of July 10, there …
Please sign in or register
for free access to 1 article per month from AsianInvestor’s content and archives of over 16,000 articles.
¬ Haymarket Media Limited. All rights reserved.