AstraZeneca stock was subject to wild swings in 2020 as the company pushed forward in developing a coronavirus vaccine. Now that the firm has authorization in the U.K., is AZN stock a buy?
(Bloomberg) -- As interest-rate jitters supercharged a meltdown in the world’s biggest bond market, Sam Sicilia barely blinked.“The markets are wrong” about inflation expectations, said Sicilia, chief investment officer of the A$56 billion ($43 billion) Host-Plus Pty pension fund in Melbourne. “Deflationary forces are bigger. Interest rates are going to stay at effectively zero.”With governments around the globe still adding to trillions of dollars of stimulus to ride out the pandemic, pension fund managers who are trying to discern the long-term effects are posing the question: Will inflation make a comeback? If it does, more than $46 trillion of global pension assets would be affected as central banks pivoted toward sustained higher interest rates.Interviews with five pension funds that help oversee parts of Australia’s A$2.9 trillion ($2.3 trillion) in retirement assets reveal a rank of investors largely unconcerned about the risk of rising prices.Last week, bond trades triggered speculation that inflation may accelerate to multi-year highs as the inevitable conclusion to the world’s $19.5 trillion coronavirus rescue package. Yields on 10-year Treasuries surged to pre-pandemic levels on Thursday, convulsing markets from stocks to credit as traders bet on more aggressive tightening -- with a U.S. interest rate hike briefly priced in for late 2022, at least a year earlier than the Federal Reserve had signaled.Debt markets calmed on Monday, as investors bet central banks would ramp up asset purchases to prevent yields rising too quickly.“I don’t think they would want to risk any recovery” by allowing markets to tighten too quickly, said Michael Clavin head of fixed-income at the A$140 billion Aware Super, Australia’s second-biggest pension fund by assets. There may be a “burst of inflationary data, but we’re not really sure it’s sustainable.”Wind VaneLike Sicilia, Clavin points to technology advancements as the biggest damper on long-term price growth.Economists have struggled for years to quantify technology’s deflationary impact on everything from supply chains to wage growth -- Clavin’s wind vane for price pressures -- but the overall effect has been to stifle price increases. And that’s not including the increased unemployment from the pandemic.Read More: Aggressive Fed Hike Bets Spur Treasury Buy-the-Dip Calls“There’s still quite a big hurdle to get the jobs back that were lost,” Clavin said. “I don’t see how you’re going to overcome those deflationary forces without some sort of wage growth.”Aware is sticking to a strategy that includes being overweight in global equities and cash in its default option to ride out the market volatility. It also invests about 15.6% of its default fund in fixed-income assets.Sicilia continues to shun “outrageously expensive” bonds and is investing in stocks and private equity on bets that risk-assets will continue to outperform as central banks keep rates near record lows.“In five to 10 years’ time, you’ll have people saying ‘we should have bought equities at 20 times earnings,’” he said. “If technology is the root cause of no inflation, that means you’re not going to be able to generate inflation anytime soon.”While bond markets suggest there may be “inflation in the pipeline”, it might be short-lived, said John Pearce, Sydney-based investment chief at the A$90 billion UniSuper Management Pty.The 30-year market veteran points to Japan as an example where inflation remains elusive despite years of quantitative easing and ultra-loose monetary policy. Markets today are a far cry from the 1970s when a massive oil shock and collapse of the Bretton Woods system turbocharged price hikes, he said.“You look at the marginal cost of everything just plummeting because of the improvements in technology -- I don’t see that stopping anytime soon,” said Pearce. “We’re not a believer that we’re going to see persistently high inflation.”It may be “worth having a look at” 10-year Treasuries if yields climb to 2.5%, he said.Contrarion BetsThat’s not to say that the recent volatility hasn’t produced some buying opportunities.When bond yields plunged to historic lows last year, IOOF Holdings Ltd. pivoted some of its funds from government debt to credit and senior loans. By December, one of the Melbourne-based pension’s underlying asset managers had switched from a long duration position -- or holding securities with higher interest-rate risk -- to a short on signs inflation pressures were building.The wagers paid off. During the worst month for Australian bond returns on record, the fund’s fixed-income strategy rose 0.6%.“Because we’re starting from such a low base on inflation, you’re probably likely to see over the next three-to-six months” economic data showing some price rises, said Osvaldo Acosta, head of fixed-interest assets who studies bonds and stock returns to look for an inflection point for inflation. “The greatest risk that we saw for the last 12 months was the amount of stimulus both monetary and also fiscal that was coming through -- it is just tremendous.”Now, with U.S. yields pulling global rates higher, Acosta is weighing his fund’s position. “Bonds are starting to look attractive,” he said.Even so, most of those managing Australia’s giant pension funds don’t see a return to the high levels of inflation that characterized U.S. economics in the 1970s.Con Michalakis, chief investment officer of Statewide Superannuation Pty, compares the S&P 500 Index dividend yield against the U.S. 10-year benchmark as a bond valuation barometer and he’s now looking at opportunities in government debt after the selloff.“We’re going to hit an inflection point -- bonds near 2% offer some insurance value that they didn’t offer when they were 80 basis points,” said Adelaide-based Michalakis. “We are in an era of slightly higher structural long-term inflation, but nothing disastrous.”(Adds tout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China’s Inner Mongolia has banned cryptocurrency mining and declared its intention of shutting all such projects by April, spurring fears the world’s No. 2 economy will take more steps this year to eradicate the power-hungry practice.The autonomous region, a favorite among the industry because of its cheap power, also banned new digital coin projects, according to a draft plan posted on the Inner Mongolia Development and Reform Commission’s website Feb. 25. The aim is to constrain growth in energy consumption to about 1.9% in 2021.The announcement unnerved an industry that’s already been through a years-long Chinese campaign to shrink it down amid concerns over speculative bubbles, fraud and energy waste. The draft policy was released weeks after the National Development and Reform Commission -- China’s top economic planner -- blasted Inner Mongolia for being the only province to fail to control energy consumption in 2019.The region now aims to cut emissions per unit of gross domestic product by 3% this year and control incremental growth of energy consumption at about 5 million tons of standard coal, according to the draft plan.Bitcoin extended gains on Monday amid reports of the move, increasing as much as 5.1% in the session to $47,559.Chinese officials first outlined proposals in 2018 to discourage crypto-mining -- the computing process that makes transactions with virtual currencies possible but consumes vast amounts of power.Inner Mongolia, which is clustered with large coal mines, is famous for inexpensive energy and has attracted investment from a plethora of power-intensive sectors such as aluminum and ferro-alloy smelting over past decades. The region accounted for 8% of global Bitcoin mining computing power, according to the Bitcoin Electricity Consumption Index compiled by Cambridge University. China overall had over 65% of the network’s total, with its appealing combination of inexpensive electricity, local chipmaking factories and cheap labor.The local crackdown is reviving old fears. Beijing since 2017 has abolished initial coin offerings and clamped down on virtual currency trading within its borders, forcing many exchanges overseas. The country was once home to about 90% of trades but the lion’s share of mining, but major players like Bitmain Technologies Ltd. have since fled abroad.Taiwan Semiconductor Manufacturing Co. and Nvidia Corp. are among listed chipmakers that supply crypto miners in China and around the world.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
State-owned Saudi Arabian Airlines (Saudia) plans to order 70 airliners from Airbus and Boeing, Saudi news outlet Maaal reported on Monday, citing unidentified sources. Saudia is in talks with local banks to raise 11.5 billion riyals ($3.07 billion) to partly finance an order for Airbus A321 narrow-bodied jets and Boeing 777 and 787 Dreamliner wide-bodies, Maaal said. The report did not breakdown how many aircraft of each type Saudia was planning to purchase.
The World Trade Organization's (WTO) first female and first African director-general Ngozi Okonjo-Iweala began work on Monday, ending a six-month leadership void by vowing to unblock negotiations on rules to stop over-fishing. The first day with the former finance and foreign minister at the helm of the WTO coincides with a meeting of its top decision-making body, the General Council. Its 164 member states will discuss topics such as trade rules on COVID-19 vaccine distribution which Okonjo-Iweala has identified as a priority.
(Bloomberg) -- Israel accused Iran of attacking one of its cargo ships in the Gulf of Oman last week, as tensions mount over the U.S.’s desire to rejoin a nuclear deal with Tehran.“It was indeed an act by Iran, that’s clear,” Israeli Prime Minister Benjamin Netanyahu said Monday in an interview with Kan radio, a local station. Iran “is Israel’s greatest enemy and we are striking it across the region.”The Israeli-owned car carrier, called the Helios Ray, was struck by an explosion while sailing 100 kilometers (62 miles) off the coast of Oman either on Feb. 25 or the early hours of Feb. 26. None of its crew was hurt and the vessel is now docked in Dubai for repairs.“We categorically reject” Israel’s accusation, a spokesman for the Iranian foreign ministry, Saeed Khatibzadeh, said in a press conference on Monday in Tehran.Friction between Israel and Iran has been high at a time U.S. President Joe Biden is exploring rejoining a 2015 accord designed to reduce Tehran’s nuclear activities. Netanyahu opposes Washington returning to the pact, saying it would pave the way for Iran to build a nuclear weapon. Biden’s predecessor, Donald Trump, withdrew the U.S. from the accord in 2018 and tightened sanctions on Iran.Iran has accused Israel of several attacks and killings in the past year. It said Israel sabotaged one of its nuclear facilities in July and assassinated a top Iranian nuclear scientist in November.Israeli media reported that the country launched missile strikes on Iranian targets in Syria over the weekend in response to the assault on the ship. Israel’s military did not comment.The Helios Ray, owned by Tel Aviv-based Ray Shipping Ltd., had traversed the Strait of Hormuz and was on its way to Singapore when the explosion occurred, according to tracking data compiled by Bloomberg and information from U.K. Maritime Trade Operations, which serves as a link between the Royal Navy and commercial vessels in high-risk areas. It turned around on Feb. 26.The Associated Press, citing unnamed American officials, said the explosion created two holes on each side of the ship, just above the waterline.Several merchant vessels have been attacked or detained in the Persian Gulf and Gulf of Oman over the last two years, rattling oil and shipping markets. Iran seized a South Korean-flagged oil tanker in the Strait of Hormuz in January and its forces boarded another ship in the Gulf of Oman in August 2020. It also detained the U.K.-flagged Stena Impero for several months in 2019.Four oil vessels were attacked with explosives in May 2019 while at anchorage off Fujairah, a United Arab Emirates port on the Gulf of Oman coast. Two more were sabotaged in the Gulf of Oman in June. Iran was blamed for the incidents but denied involvement.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Griddy Energy LLC , a Texas retail electricity provider that came under fire after its customers received exorbitant power bills during the energy crisis last week, was barred from participating in the state’s power market Friday.The Electric Reliability Council of Texas revoked Griddy’s rights to conduct activity in the state’s electricity market due to nonpayment, according to a market notice seen by Bloomberg.The Macquarie Energy-backed company said previously it would challenge the prices set by the grid operator during the crisis and its chief executive officer, Michael Fallquist, declined to testify at Texas legislative hearings Friday.Griddy said in a statement Friday that the decision on pricing was made “to take the price out of the hands of the market,” adding that “we wanted to continue the fight for our members to get relief and that hasn’t changed.” For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The report added that it was not clear over what period British-based AstraZeneca sold its holding in Moderna. AstraZeneca and Moderna did not immediately respond to requests for comment. AstraZeneca is retaining partnership with Moderna on other disease treatments and could sell its AstraZeneca/Oxford University COVID-19 vaccine on a commercial basis in future if the virus becomes endemic, the report added.
- Yahoo Finance
While Warren Buffett isn’t known to prognosticate on where interest rates are heading, he warns that fixed-income investors “face a bleak future."
(Bloomberg) -- For all the optimism about travel restarting as vaccines are rolled out, airline stocks still have a way to go to make up the ground they lost in the pandemic. It may take signs of a recovery in long-haul flights for the sector to make further gains.The Bloomberg World Airlines Index soared 15% this month but is 17% below its 2020 peak, set in January before the coronavirus outbreak hit the world with full force. Leisure travel looks set to rebound sharply in coming months, if bookings are any guide, though a revival of business trips and intercontinental flights seems a bit further off.“Globally, countries still need to reopen their borders, as well as reopen tourist attractions and the like before people travel internationally,” said Helane Becker, an analyst at Cowen Inc. in New York. “Airlines need for things to reopen and for borders to reopen and the revenue issue will resolve itself.”Among European airlines the big winners have been Ryanair Holdings Plc, the Irish low-cost carrier, and Wizz Air Holdings Plc, the Eastern European company that’s modeled itself after Ryanair. They’ve benefited from a focus on vacationers rather than business clients.British Airways parent IAG SA on Friday posted its first annual loss in almost 10 years, but said there’s reason for optimism about this summer.Still, work-related travel may be slower to return given that many businesses have grown more comfortable with remote working and video conferencing.“As travel restrictions in the U.K. and elsewhere ease, we believe demand will recover quickest at Ryanair, Wizz Air and other low-cost carriers,” Rob Barnett and Conroy Gaynor of Bloomberg Intelligence wrote in a report last week. “A slower pace is likely at full-service airlines such as IAG, as the rebound in long-haul travel may not be as quick.”Analysts are skeptical about the recovery. Among major European airlines, brokerages see only two providing investors with a positive share-price performance over the next year. For Deutsche Lufthansa AG and Air France-KLM, the average analyst price target implies declines of more than 40%.In Asia, where the pandemic hit first early last year, a Bloomberg Intelligence index of Asian carriers has surged 5.4% this week, beating the region’s benchmark by the most in more than a decade. The index recouped all the losses from last month, when a resurgence of infections in Asia rattled travel-related stocks. The sector is at the highest since January 2020, when Covid-19 started to force passengers to cancel trips.“I think the vaccine news has been priced in,” said Luya You, an analyst at Bocom International in Hong Kong. “For airline stocks to rise further, we really need to see what the vaccine take-up is like later this year.”If the vaccine is widely accepted, she said, the next thing to watch is whether Asia countries use so-called vaccine passports -- certificates to exempt travelers from quarantines or have shorter quarantine time. “This will be a huge catalyst for the sector,” she said.You has buy ratings on companies in China, where the coronavirus largely has been contained, including China Southern Airlines Co., Air China Ltd. and China Eastern Airlines Corp. The carriers have the potential to grab global market share once international travel resumes, You said.In the U.S., airline shares have soared since August amid the growing optimism about coronavirus vaccines. The biggest gainers include Hawaiian Holdings Inc., Alaska Air Group In., SkyWest Inc., JetBlue Airways Corp. and Delta Air Lines Inc.Stronger balance sheets are also supporting the sector’s recovery. Shareholders subsidized the industry’s sudden cash needs through at least 17 stock offerings during the pandemic, according to data compiled by Bloomberg. Carriers that used their equity lifelines are now trading 87% above their offering prices, on average.However, investor enthusiasm may be getting ahead of itself as Wall Street analysts strike a far more cautious note. While an S&P index of airline stocks is now only down about 14% since the beginning of 2020, the average 2021 earnings estimate for the carriers has stayed around the same level since May, after dropping precipitously in early March of last year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
As mortgage rates rise, the shorter-term mortgages are looking attractive.
(Bloomberg) -- Sign up for the Bloomberg Green newsletter, your guide to the latest in climate news, zero-emission tech and green finance.Aviva Plc said it will eliminate carbon emissions across all its activities by 2040, the first insurer to make such a commitment.The U.K. company said in a statement Monday that it aims to cut the net emissions from its operations and supply chain to zero by 2030 and achieve the same for its investments within 10 additional years. Aviva, which manages 522 billion pounds ($729 billion) of assets, will report annually on its progress and also announced a series of interim targets, including an ambition to reduce the carbon intensity of its investments by 60% by 2030.Banks, insurers and other financial-services firms are under growing pressure to demonstrate to investors, regulators and the public how they’re playing their part to address the threat of climate change and preparing their businesses for a future economy that’s much less dependent on fossil fuels. Many have responded by pledging to reach net-zero emissions several decades into the future, typically by 2050. While that gives them plenty of time to achieve the targets, reducing emissions across a diversified portfolio is no small undertaking.“We have a huge responsibility to change the way we invest, insure and serve our customers,” Aviva Chief Executive Officer Amanda Blanc said in the statement. “For the world to reach net zero, it’s going to take leadership and radical ambition.”Aviva said its net-zero goal includes shareholder and policyholder assets where it has decision-making control. It also covers the company’s holdings of corporate credit, equities, direct real estate and sovereign debt.The insurer said it will increase its green investments and allocate a further 10 billion pounds from its auto-enrollment default funds and other policyholder funds into low-carbon strategies by the end of next year.By the end of 2021, Aviva said it will stop underwriting companies that make more than 5% of their revenue from coal unless they have signed up to the Science Based Targets initiative, widely regarded as the gold standard for climate plans. And it will divest from companies that fail to meet this criteria by the end of 2022.Aviva is a member of the Net-Zero Asset Owner Alliance, which was convened by the United Nations and counts many of the world’s biggest pension and insurance funds among it members. The Alliance has set a minimum net-zero target for no later than 2050.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Hyatt Hotels Corp called symbols of hate "abhorrent" on Sunday after the design of a stage at the Conservative Political Action Conference at one of its hotels drew comparisons to a Norse rune used by Nazis during World War Two. High-profile Republicans including former President Donald Trump were attending the four-day event in Orlando, Florida, as conflict rages between Trump allies and establishment politicians trying to distance the party from him. A photo of the CPAC stage went viral on social media on Saturday, with thousands of Twitter users sharing posts comparing its distinctive design to an othala rune, one of many ancient European symbols that Nazis adopted to "reconstruct a mythic 'Aryan' past," according to the Anti-Defamation League.
- FX Empire
Gold is just an investment that competes for capital just like bonds, stocks and now cryptocurrencies.
- Simply Wall St.
It's been a good week for EVRAZ plc ( LON:EVR ) shareholders, because the company has just released its latest...
Some analysts worry that rising bond yields might prompt the Federal Reserve to tighten historically loose monetary policy, prompting a correction in assets perceived as risky.
Warren Buffett makes mistakes too. The 90-year-old billionaire on Saturday admitted he "paid too much" when his Berkshire Hathaway Inc spent $32.1 billion in 2016 to buy aircraft and industrial parts maker Precision Castparts Corp, its largest acquisition. Berkshire wrote off $9.8 billion of Precision's value last August, as the coronavirus pandemic sapped demand for air travel and the Portland, Oregon-based unit's products.
(Bloomberg) -- President Joe Biden called it “outrageous” that Saudi Arabia’s Crown Prince Mohammed bin Salman signed off on the killing of Washington Post columnist Jamal Khashoggi, and cast ahead to an announcement about the kingdom next week.Biden said in an interview with Univision News that he told Saudi King Salman this week that “the rules are changing” in the kingdom’s relationship with the U.S. and promised “significant changes” on Monday.The prince has denied involvement in the killing and the kingdom rejected what it called a “false” U.S. narrative. No sanctions have been announced against him.The Biden administration on Friday released a partially redacted report the Trump administration withheld from the public revealing that the U.S. intelligence committee believed the crown prince was responsible for Khashoggi’s October 2018 murder inside the Saudi consulate in Istanbul.“We assess that Saudi Arabia’s Crown Prince Mohammed bin Salman approved an operation in Istanbul, Turkey, to capture or kill Saudi journalist Jamal Khashoggi,” the report concluded.“It is outrageous what happened,” Biden said.Saudi stocks fell on Sunday, the first day of trading in Riyadh after the release of the report.Kingdom ‘Rejects’ FindingThe report builds on classified intelligence from the CIA and other agencies. The kingdom dismissed it outright.“The government of the Kingdom of Saudi Arabia completely rejects the negative, false and unacceptable assessment in the report pertaining to the Kingdom’s leadership, and notes that the report contained inaccurate information and conclusions,” the Saudi Foreign Ministry said in a statement.The prince has said he accepts symbolic responsibility for the killing as the country’s de facto ruler. Saudi officials have said the murder was carried out by rogue agents who’ve since been prosecuted. Relevant authorities took “all possible measures within our legal system” to ensure those agents were properly investigated and that justice was served, the statement said.The decision to release the report, compiled by the Office of the Director of National Intelligence, reflects the Biden administration’s determination to recalibrate relations with Saudi Arabia, the world’s largest oil exporter, over its human rights record.Saudi Commentators Welcome U.S. Report as VindicationAlthough the four-page declassified version didn’t disclose any direct evidence or the U.S. intelligence methods that were used in reaching its conclusion, it said the team that killed Khashoggi included seven members of the crown prince’s “elite personal protective detail” who wouldn’t have taken part without his approval.“The Crown Prince viewed Khashoggi as a threat to the Kingdom and broadly supported using violent measures if necessary to silence him,” the report said. The report said it had “high confidence” about the 21 people who were involved in the killing on the prince’s behalf.At least for now, there is no indication that the U.S. plans to sanction the crown prince. That’s in keeping with a broader assessment that he’s destined to be the kingdom’s ruler for years to come and punishing him now would risk alienating a country that, for all its flaws, remains a crucial ally.Saudi Arabia dominates the Gulf Arab region geographically, is its economic powerhouse, and has for decades been a political heavyweight in regional affairs. It’s also one of the biggest customers for American arms.Biden will have to navigate the relationship with Saudi Arabia carefully, however, as he seeks to re-engage Iran and persuade it to resume compliance with the nuclear accord. Signaling that being tougher on Saudi Arabia won’t mean he’s soft on Iran, the administration ordered airstrikes overnight on Iranian-backed militias in Syria that it blames for rocket attacks on U.S. forces in neighboring Iraq.“There will be an announcement on Monday as to what we are going to be doing with Saudi Arabia generally,” Biden told reporters as he departed the White House on Saturday for his home in Delaware.Economic PowerhouseAfter the report was released, Secretary of State Antony Blinken announced sanctions against 76 Saudi individuals under what he called a new “Khashoggi Ban” policy. Under that authority, the U.S. says it will single out anyone who, acting for a foreign government, engages in “counter-dissident activities” beyond that country’s borders.State Department spokesman Ned Price had told reporters Thursday that the U.S. was looking at other ways to punish the perpetrators of Khashoggi’s killing. Among the options may be cutting back arms sales to Saudi Arabia, he said without elaborating.The decision to release the report reflects a return, under Biden, to routine diplomatic channels and traditional U.S. pressure over human rights, even on allies.Trump put Saudi Arabia at the center of his Middle East strategy, making it his first foreign visit. He later abandoned the 2015 nuclear deal with a common enemy, Iran, and reimposed sanctions on Tehran.Trump dismissed concerns about whether the crown prince approved the Khashoggi killing -- “Maybe he did, maybe he didn’t,” he said -- citing the economic rewards of selling arms to the Saudis. His secretary of state, Michael Pompeo, said the U.S. had “no direct evidence” linking the prince to the murder, while Trump’s son-in-law Jared Kushner maintained a close working relationship with him.In contrast, within his first few days in office, Biden put on hold major weapons sales to the kingdom pending review, and announced an end to U.S. support for offensive actions in Yemen. In an overt rebuke, he also downgraded relations with Prince Mohammed, who runs the day-to-day affairs of the kingdom and typically liaises directly with foreign leaders. Instead, Biden has called King Salman his official counterpart.(Updates with Saudi market reaction on Sunday in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The Serum Institute of India isn't a household name, but it's the world's largest vaccine maker.
Warren Buffett's enthusiasm for the future of America and his company Berkshire Hathaway Inc has not been dimmed by the coronavirus pandemic. Buffett used his annual letter to investors to assure he and his successors would be careful stewards of their money at Berkshire, where "the passage of time" and "an inner calm" would help serve them well. Despite the disappearance last year of more than 31,000 jobs from Berkshire's workforce, Buffett retained his trademark optimism, buying back a record $24.7 billion of its stock in 2020 in a sign he considers it undervalued.
(Bloomberg) -- As investors fled almost every fixed-income asset from the safest government bonds to the highest-yielding securities last week, one market stood out as a haven.Funds poured $671 million into exchange-traded funds tracking yuan bonds last week, taking inflows so far this year to $2.2 billion, data compiled by Bloomberg show. In contrast, they offloaded almost $600 million of emerging-market notes last week.China’s bonds have largely escaped the tumult in global debt markets, with yields on the benchmark holding firm on Thursday while that on Treasuries soared more than 20 basis points. Chinese sovereign notes were the third-best performer globally in February, according to data from indexes compiled by Bloomberg and Barclays Plc.“China bonds are likely to be a safe haven now -- stable policy and growth make them less volatile compared to global peers, while yields are also more attractive,” said Xing Zhaopeng, a senior China strategist at Australia & New Zealand Banking Group Ltd. in Shanghai. “The notes’ relative performance this year will be better than bonds sold by other major economies.”With strategists warning of more volatility in the days ahead, investors may find safety in the more-insulated Chinese debt market where fears of sudden monetary tightening are less prevalent. The authorities’ successful containment of the coronavirus outbreak has also allowed the economy to rebound more quickly.China’s benchmark 10-year yield fell two basis points to 3.26% Monday while 10-year bond futures jumped 0.3%, the most since December. The spread between the 10-year Chinese yield and its U.S. counterpart was at 1.82 percentage points on Monday. This compares with a five-year average of 1.25 percentage points.EPFR Global data showed China bond funds absorbed record flows in the week ended Feb. 24, with investments almost breaching the $2 billion mark.Other large Asian economies such as Indonesia and India do offer higher returns, but they remain vulnerable at times of stress, with major ratings agencies assessing China’s debt as four-to-five levels more sound.And while other countries are still in the process of selling near-record amount of debt to fund stimulus, China’s faster-economic recovery means there could be less supply. Economists expect the government to lower its fiscal deficit target, while cutting its quota for special local bonds.The iShares China CNY Bond UCITS ETF, which tracks the Bloomberg Barclays Index of Chinese government and policy bank debt, saw the largest inflows among all similar contracts this year, data compiled by Bloomberg showed. The fund gained 8.8% over the past year, beating most global peers.The Bloomberg Barclays China Aggregate Index, which tracks the performance of the yuan-denominated debt, is up 1.5% year-to-date, while the global aggregate index is down 2.6%.Overseas investors are also buying more Chinese notes directly. In January, they purchased $27 billion of bonds in the interbank market, the most according to data going back to 2014. Sovereign securities accounted for $19 billion of the total inflows.(Adds China bond yield and futures in sixth paragraph, EPFR Global data in seventh paragraph and background in eighth and ninth paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.