Carrie Lam launches Bond Connect

Hong Kong’s newly inaugurated Chief Executive, Carrie Lam, opened the China ‘Bond Connect’ platform at the Hong Kong Stock Exchange today.

The bond platform links the Shanghai and Hong Kong exchanges, enabling international investors to access the nine trillion domestic bond markets in China and take interest payments on coupons out of the country. The platform is currently only inbound and does not give Chinese investors access to international bond issuers.

The opening of China’s debt markets, coinciding with the 20^th anniversary of the handover of Hong Kong, is a significant step in the internationalisation of the RMB.

Currently foreign investors own just two per cent of Chinese bonds. That number is expected to rise significantly as Chinese banks and companies issue RMB dominated paper to raise capital from international funds. The bond platform launch follows the successful opening of the Shanghai-Hong Kong equities platform in 2014.

Asia House will be producing a signature conference in Hong Kong in November and connectivity will be a major theme, click here for more info.