China-Hong Kong Bond Link Trades Start Monday, Website ShowsBloomberg News
Calendar posted late Friday shows July 3 as a trading day
Start coincides with 20th anniversary of handover to China
The website of China’s bond connect program with Hong Kong revealed that trading across the long-awaited connection will kick off Monday, superseding any official announcement.
A calendar posted on the site late Friday shows July 3 as the opening of the link, which will give offshore investors another way to access the mainland’s $10 trillion debt market. Bourse operator Hong Kong Exchanges & Clearing Ltd. said separately late Friday that a launch ceremony was scheduled for Monday.
The first day of trading will coincide with the 20th anniversary of Hong Kong’s handover to China, and come just after President Xi Jinping concludes his visit to the city. Xi said Friday in a speech at a dinner in Hong Kong that the bond connect will start soon. He is scheduled to speak Saturday morning along with incoming leader Carrie Lam at her inauguration.
The system will echo the two stock connect programs between the former British colony and the mainland, offering investors access to one of the world’s biggest markets without being required to meet strict capital controls. It’s the latest step in China’s efforts to open up and integrate into the global financial system. Last week MSCI Inc. said it would include the nation’s shares in its benchmark indexes.
Lam will be the guest of honor at a launch ceremony scheduled for 9 a.m. Monday, according to a media advisory from HKEX late Friday. People’s Bank of China Deputy Governor Pan Gongsheng, Hong Kong Monetary Authority Chief Executive Norman Chan, and Hong Kong Financial Secretary Paul Chan also will attend, according to the statement.
It is expected that a total of six bonds will be issued on the primary market under the program Monday, the China’s Securities Times reported Friday. The official newspaper, which is affiliated with the Communist Party’s People’s Daily, cited an unidentified person close to a regulatory department.
The corporate communications office at didn’t answer calls seeking comment outside of regular business hours.
The PBOC issued temporary rules for the bond connect on June 21. Among the provisions:
- PBOC and related regulators have the right to access offshore investor data
- Bonds bought by foreign investors are to be held under name of nominal holder
- Offshore investors can use either yuan or foreign currencies
Authorities previously said eligible investors would include overseas central banks, sovereign wealth funds, international financial companies, and medium- to long-term institutional investors.
— With assistance by Robin Ganguly, Tian Chen, and Helen Sun