New bond connect information platform launched in support of Greater Bay Area initiatives

Hong Kong Exchanges and Clearing launched a new bond connect information platform on Friday to make it easier for international investors to trade Chinese bonds, reflecting the first move to enhance the cross border trading scheme since Beijing announced the “Greater Bay Area” project blueprint on Monday.

Launching the new cross-border investment scheme and enhancing the existing stock and bond connect schemes are among the major proposals in the Greater Bay Area project.

“The bond connect has grown fast since its launch in July 2017. The new platform launch today works like a bond issuance connect, which would make it easy for international investors to trade the newly issued bonds,” said Charles Li Xiaojia, chief executive of HKEX, at a ceremony to introduce the new platform on Friday.

HKEX and the Shanghai Stock Exchange launched the first stock connect in 2014. The Shenzhen Stock Exchange joined in 2016 and the north bound bond connect was launched in 2017.

The new primary market information platform will connect global bond connect investors and support bond issuance information through a centralised portal in a timely manner.

“The bond connect turnover has grown rapidly. With the launch of the new platform, it will enhance the bond connect scheme by providing more information for international investors to trade newly-issued bonds in the mainland,” said Keith Lui, executive director of the Securities and Futures Commission, at the launch ceremony.

Lui said the bond connect turnover reached a record 133 billion yuan (US$19.77 billion) in January, compared to whole year turnover of 220 billion yuan in 2018. The average turnover stood at 60 billion yuan a day in January, almost double the 36 billion yuan a day average in 2018. There are 560 international fund houses and banks to trade 32,000 mainland bonds via HKEX bond connect schemes.

“When the conditions are ready, the south bound trading of the bond connect will also happen,” Lui said.

Lui said the SFC would fully support the future development of the cross-border trading scheme to be launched under the Greater Bay Area project.

“The SFC will focus on investment protection and market development to make sure Hong Kong can play an important role in the cross-border investment schemes related to the Greater Bay Area,” he said.