Key projects will boost securities business: CE
Chinese Securities Association of Hong Kong and chief executive officer of BOCOM International Holdings Co Ltd
Ts e s a i d s t a r t i n g w i t h northbound trading may be due to the fact the mainland is the world’s third-largest marke t for bonds with a market size of $8.5 trillion and multiple products, adding that up to 90 percent of the marke t involves interbank bonds, while the rest are exchange-traded bonds.
He said the bond connect marks the third of three steps in the opening-up of the mainland’s bond market. The first step allows overseas investors direct access to its capital market through the Q u a l i f i e d Fo r e i g n In s t i t u - tional Investor (QFII) program, which was introduced in 2002, followed by the opening up of the interbank bonds market in 2005, allowing access to foreign investors even without the QFII.
Yim Fung, chairman and chief executive officer of Guotai Junan International Holdings Ltd, said the bond connect will facilitate internationalization of the renminbi and improve Hong Kong ’s role as a global financial centre as its bond market is still relatively smaller compared with other mature financial centers.
He said the link will benefit mainland brokerages as trading is their main business, while Hong Kong’s market is dominated by stocks and its bond business is still developing.
So far, Hong Kong’s benchmark Hang Seng Index has rallied more than 40 percent, or 8,000 points, from last year ’s low of 18,000 points in February to nearly 26,000 points in June this year, outperforming major indexes across the globe.