Welcome remarks by Taran Khera, Head of Asia for Bloomberg
Hong Kong – On May 16, the People’s Bank of China and Hong Kong Monetary Authority made a joint announcement on the Bond Connect, a new initiative that allows overseas institutional investors to trade in China’s interbank bond markets, through a connection between Mainland China and Hong Kong financial infrastructure institutions. The day after, Bloomberg launched the RMB Bond Suite in preparation for greater investor interest in China’s $9 trillion domestic bond market.
In response to market interest around the Bond Connect programme, Bloomberg today gathered more than 150 market participants in Hong Kong to discuss how the initiative will work, how it will facilitate northbound trading and its operational details.
The event was kicked off by Romnesh Lamba, Co-Head of Market Development at Hong Kong Exchanges and Clearing Limited (HKEx), who delivered a keynote outlining how the Bond Connect can help investors and a vision of how it would work.
Romnesh Lamba, Co-Head of Market Development at Hong Kong Exchanges and Clearing Limited (HKEx), delivering his keynote speech
This was followed by a panel comprised of senior market practitioners from HKEx, Hong Kong Monetary Authority, BNP Paribas, Standard Chartered, Bank of China Hong Kong and Tianfeng International Securities, who gave their opinions on how the Bond Connect programme would operate and the technical considerations.
Speaking at the event, Taran Khera, Head of Asia for Bloomberg, reaffirmed that Bloomberg will lend its full support to the Bond Connect programme, and is working with the respective parties. He also mentioned that the Bond Connect scheme between Hong Kong and mainland China is a positive step in China’s continued financial reform and will contribute to further liquidity and transparency.
These views were echoed in a poll conducted at the event, which revealed that over 80% of the attendees felt that the Bond Connect will widen the investor base for China’s onshore interbank bond market, but only over time. Their key areas of interest regarding the Bond Connect programme primarily pertained to onboarding and KYC requirements and operational efficiency (both at 25%).
The announcement of the Bond Connect initiative comes more than two years after Beijing launched the Shanghai-Hong Kong Stock Connect, the first mutual market access initiative between Hong Kong and Mainland China, in November 2014. Chinese authorities further widened this with the opening of the Shenzhen-Hong Kong Stock Connect in November 2016.