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  • Home > News > Details

    Increasing numbers of foreign institutions are inclined to invest in China's interbank market via the Mainland-Hong Kong Bond Connect that began this July, said Zhang Cuiwei, vice president of China Foreign Exchange Trade System and chairman of the bond connect company.

    The remarks were made at a symposium on opportunities and challenges of the internationalization of China's capital market held in Shanghai's Lujiazui area on Oct 31.

    Zhang said that more than 200 foreign institutions have entered China's interbank market via the bond connect over the past four months. The daily trade volumes of the bond connect reached 2 billion yuan ($301.6 million) and the aggregated volume exceeded 170 billion yuan.

    Since its launch in July, the Mainland-Hong Kong Bond Connect has been serving a new access for foreign investors to enter Chinese bond market, apart from QFII (Qualified Foreign Institutional Investors) program and direct investment bonds.

    Kyle Tan, head of the trade department at DBS Greater China, witnessed the first trade order of the bond connect and said that he has to meet seven to eight investors every day after the launch of the bond connect.

    Tan also mentioned the high efficiency of the bond connect, as the entire trading process can be completed within two weeks and sometimes even two days.

    A total of 21 bonds under the Mainland-Hong Kong Bond Connect project have been issued over the past four month, raising capital of 60 billion yuan, according to Yan Shoujing, head of bond capital market department at Standard Chartered Bank Greater China.

    Yan introduced that the aspects that concern the overseas investors are the low fluidity of Chinese bond market and the large number of AAA-rated bonds, making it difficult for overseas investors to differentiate between the good and the bad.

    Zhang Yashuang, head of the issuance and trusteeship department at Shanghai Clearing House, said that it is still necessary to promote the opening up of Chinese bond market, as the funds under trusteeship in interbank market exceed 60 trillion yuan, but the overseas holders are less than 2 percent.

    Zhang Cuiwei added that more tradable products under the bond connect project will be launched to satisfy the various needs of overseas investors.

    The symposium, a joint effort of Lujiazui management bureau, International Capital Market Association, and Zhong Lun Law Firm, brought together many top managers from leading financial institutions at home and abroad.

    The attendees discussed the bond connect, Panda bond and opening up of the Chinese bond market, the development of green bond in China, and other related topics. The event is expected to promote the link between Chinese and international capital markets, and push forward the internationalization of Lujiazui Financial City.

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