Published: Thu, May 18, 2017
Global Media | By Garry Long

Hong Kong, China Regulators Approve 'Bond Connect' Scheme

Hong Kong, China Regulators Approve 'Bond Connect' Scheme

The Financial Secretary, Mr Paul Chan, said, "Bond Connect marks an important milestone in the further development of mutual capital market access between the Mainland and Hong Kong".

According to the Hong Kong Monetary Authority and People's Bank of China, the program will start with "northbound trading", allowing global and Hong Kong investors to trade onshore bonds in the initial phase.

Foreigners have to date invested around 800 billion yuan (US$116 billion), or just 2 percent, in the onshore Chinese bond market, which is the third-largest globally with an outstanding amount of about 66 trillion yuan (US$9.6 trillion) at the end of March.

"Bond Connect will facilitate investors' participation in the bond markets, improve the connectivity between market infrastructures and promote the healthy development of the bond markets, thereby enhancing Hong Kong's status as an worldwide financial centre and the global offshore Renminbi business hub".

"Hailed as Asia's premier global financial hub, Hong Kong is strategically positioned as the natural gateway linking our mainland to the world".

The company, which also has investments in at least 14 mainland Chinese cities, does not have its own flagship skyscraper in Hong Kong and analysts expect it to move its headquarters to this new location upon completion.

It will begin by giving Hong Kong and overseas investors "northbound" access to the China interbank bond market.

PCB suspends Mohammad Nawaz for two months
In its press release, the PCB stated that Nawaz was charged with a single violation of Act 2.4.4 of its anti-corruption code. The PCB didn't clarify when exactly Nawaz was approached.

A total of 473 overseas investors hold 800 billion yuan of outstanding investment in the interbank bond market.

The Hong Kong Monetary Authority (HKMA) and the People's Bank of China (PBOC) announced their approval late on Tuesday, but provided few details about the plan, such as when the bond trading system would go into operation.

Mainland Chinese firms have doubled their presence in Central in less than a decade, taking up 21 per cent of all floor space leased in the Central Grade A office market in early 2016, compared to 10 per cent in 2009, according to real estate services firm JLL.

In line with broader foreign access rules, overseas investors including pension funds, central banks and sovereign wealth funds will be eligible to trade sovereign and local government bonds, policy bank bonds and corporate debt on the Bond Connect.

Regulators in Hong Kong and China have approved a program that will allow investors operating in Hong Kong to trade in the Chinese bond market.

The regulators said CFETS and HKEX will work with an worldwide bond trading platform to provide electronic bond trading between foreign investors and mainland dealers, but did not provide further details.

Around two months ago, Premier Li Keqiang said the bond connect would be established on a trial basis this year during a press conference after the national legislative annual session, promising continued support for Hong Kong from the central government.

Like this: