Benchmark by Dao Heng runs rule over notes
Dao Heng Bank is contributing to the development of the retail debt market by launching a benchmark for Hong Kong Government bonds.
The benchmark measures bonds with an aggregate market capitalisation of more than US$4.8 billion, and provides a standard to gauge the performance of Hong Kong Government bonds and other fixed-income products.
Dao Heng said it would also extend the trading hours for Hong Kong Exchange Fund bills - due to be listed in the second half of this year - and promote fixed-income instruments to retail customers.
Managing director Randolph Sullivan said Dao Heng would seek to contribute to the development of the local capital market by promoting activity and transparency via the benchmark, the Dao Heng Government Bonds Master Index, and other initiatives.
The Exchange Fund bills are issued and guaranteed by the Government on behalf of the Hong Kong Monetary Authority. Dao Heng said trading in them would be extended to 10pm from an earlier planned closing bell of 4pm.
The announcement comes amid signs that corporates are more actively tapping debt capital markets according to debt research house Basisfield. In the first quarter HK$33.8 billion was raised in 172 issues in Hong Kong - and increase of 72.3 per cent over the same period last year.
The activity reflected such deals as the US$575.2 million securitisation of Wharf (Holdings)'s Harbour City property and HK$1 billion in fixed-rate notes from a Cheung Kong (Holding) offshoot.
'The record quarter for capital markets reinforces the shift towards capital markets over the syndicated loan market for corporates' Hong Kong dollar funding,' said Basisfield.