Bond Connect hopes rein in foreign interest in yuan bonds

Anticipation of new mainland-HK trading link offsets many other positives

Foreign institutional investors' or FIIs' holdings of yuan-denominated bonds increased in May but only just, and fell short of expectations, due to talk that a much-anticipated Bond Connect may link the Chinese mainland and Hong Kong markets soon, market people said.

For three consecutive months, FIIs' holdings of yuan-denominated bonds increased, to reach 806.38 billion yuan in May, up by 4.5 billion yuan or 1.32 percent, China Merchants Securities or CMS said in a research note.