“JP Morgan significantly cuts China’s share from ‘Asian credit index’”

Reuters reported on February 27th that JP Morgan will significantly reduce the proportion of China in the JP Morgan Asia Credit Index (JACI).

Citing sources, Reuters reported that JPMorgan has cut the proportion of Chinese bonds from the JACI to 43%, reflecting the escalating geopolitical tensions between the United States and China and the shrinking demand for Chinese real estate bonds. He said he had decided to lower it to 30%.

JACI is an index covering investment grade and speculative grade bonds issued in Asian foreign bond markets. The ratio of China is the largest.

JP Morgan said the new index is an improved version of the JACI with increased exposure to Asia-Pacific markets such as Japan, Australia, New Zealand and Papua New Guinea.

Reuters reported "To avoid geopolitical risks, global investors are increasingly looking for Asian products not exposed to China, which has been hit by a regulatory crackdown and a liquidity crisis in the real estate sector."