Bonds in the limelight as stocks lose their sheen

SHANGHAI: China's decision to boost economic growth with more spending on construction and social programs, coupled with falling share prices, may see the bond markets emerging as a major financing channel and spur more mergers and acquisitions (M&As), according to industry experts.

"China's real economy is not an isolated island from the ongoing global economic downturn, but we still believe that its impact on the country's capital market is limited, given the country's ample foreign currency reserves and the lower leverage of domestic companies to their foreign counterparts," said Zhang Liping, CEO of Credit Suisse China.

The focus in domestic capital markets will shift toward bonds, rather than initial public offerings (IPO) as it may take longer than expected to bolster sagging market sentiment, say experts.