Main­land, HK to join on bonds

China Daily (Hong Kong) - - BUSINESS - By CAI XIAO caix­iao@chi­

The Chi­nese main­land and Hong Kong will work to­gether in the bond mar­ket to fa­cil­i­tate for­eign in­vestors’ bonds pur­chases, said the chief ex­ec­u­tive of the Hong Kong Mon­e­tary Au­thor­ity.

Nor­man Chan, chief ex­ec­u­tive of the HKMA, said the Shang­hai-Hong Kong Stock Con­nect and Shen­zhenHong Kong Stock Con­nect showed that the stock mar­ket link be­tween the main­land and Hong Kong has been built, and their next work is to study the bond mar­ket con­nect.

“The scale of do­mes­tic bond mar­ket has been more than 60 tril­lion yuan ($8.94 tril­lion), and the pro­por­tion of for­eign in­vestors is less than 2 per­cent, so there’s great po­ten­tial,” said Chan.

Hong Hao, chief strate­gist at BOCOM In­ter­na­tional Hold­ings Co, said the bond mar­ket con­nect can im­prove trans­ac­tion ac­tiv­ity in Hong Kong.

“The bond mar­ket con­nect be­tween the main­land and Hong Kong can be sig­nif­i­cant in the long term,” said Hong. “the yuan’s in­clu­sion in the IMF Spe­cial Draw­ing Right cur­rency bas­ket and other glob­al­iza­tion moves will in­crease global de­mand for ren­minbi as­sets.”

The HKMA and China De­vel­op­ment Bank Corp also signed a me­moran­dum of un­der­stand­ing on Tues­day to es­tab­lish a strate­gic frame­work of co­op­er­a­tion to fa­cil­i­tate the fi­nanc­ing of in­fra­struc­ture projects via the In­fra­struc­ture Fi­nanc- ing Fa­cil­i­ta­tion Of­fice plat­form of the HKMA.

“IFFO and CDB will closely col­lab­o­rate to pro­mote a more con­ducive en­vi­ron­ment for in­fra­struc­ture in­vest­ment and fi­nanc­ing in Hong Kong, and will jointly fa­cil­i­tate ben­e­fi­cial de­vel­op­ment of the Belt and Road Ini­tia­tive through ex­chang­ing in­for­ma­tion and ex­pe­ri­ence in eval­u­at­ing in­fra­struc­ture projects, con­duct­ing pro­mo­tion ac­tiv­i­ties, and fa­cil­i­tat­ing in­fra­struc­ture fi­nanc­ing trans­ac­tions,” said Chan.

As of Oc­to­ber, CDB’s as­sets in Hong Kong ex­ceeded $50 bil­lion, and the bank has through Hong Kong com­pleted 29 in­fra­struc­ture projects with in­vest­ments of more than $5 bil­lion in the Belt and Road coun­tries , ac­cord­ing to an HKMA state­ment.

It said the CDB will tap more than $10 bil­lion worth of fi­nanc­ing and busi­ness op­por­tu­ni­ties via the Hong Kong plat­form.

“CDB will con­tinue to play its role as a lead­ing bank of the Belt and Road Ini­tia­tive and fur­ther strengthen co­op­er­a­tion with the HKMA through the IFFO plat­form, to jointly con­trib­ute to the im­ple­men­ta­tion of the Belt and Road Ini­tia­tive and the pros­per­ity and sta­bil­ity of Hong Kong,” the state­ment quoted Hu Huaibang, chair­man of CDB, as say­ing.

Nor­man Chan, chief ex­ec­u­tive of Hong Kong Mon­e­tary Au­thor­ity

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