Evergrande stress boosts fledgling China CDS indexes

Interest surges in products seen as better gauges of credit risk for embattled property sector

Banks in China report seeing an explosion of interest in newly launched credit default swap (CDS) indexes, as mounting stress in the country’s property sector prompts more institutions to seek hedges for credit exposures.

A CDS index known as the Private Enterprise CDS Index was launched in April this year, containing five property developers. Its introduction to the market has come at a fortuitous time for banks, coinciding with a liquidity crisis that has left some of the country’s biggest