Bond Connect launch details expected within weeks
Work also continues on planning a Commodities Connect for cross border metals trading, Hong Kong Financial Secretary Paul Chan Mo-po tells forum
Hong Kong Exchanges and Clearing (HKEX) is expected to announce the launch details of its planned Bond Connect within the next few weeks, and also continues working on planning for a Commodities Connect for cross border metals trading, according to the city’s top finance official.
“Hong Kong and the mainland will soon have the Bond Connect which will be the first cross border bond trading programme for foreign investors to invest in the mainland bond market,” said Financial Secretary Paul Chan Mo-po, in his keynote speech to the LME Asia Week forum in Hong Kong on Wednesday.
Details about the Bond Connect’s clearing and settlement arrangements will be announced within the next few weeks, HKEX chief executive Charles Li Xiaojia also confirmed at the same forum.
While neither could give exact timings, Premier Li Keqiang in March indicated the new scheme will happen this year, while brokers speculate a launch could come as early as July to mark the 20th anniversary of the handover of Hong Kong back to China.
China is now the world’s third largest bond market, worth US$7.5 trillion, after the US at US$35 trillion and Japan at US$11 trillion.
However, foreigner investors hold less than 3 per cent of that Hong Kong total, as the country has not yet opened up its capital market, according to Standard Chartered Bank.