The Bond Connect Company Limited (BCCL) today (Tuesday) marked the first anniversary of Bond Connect, a mutual bond access programme between Hong Kong and Mainland China, with a forum and awards gala held at the Hong Kong Exchanges and Clearing Limited’s (HKEX) Connect Hall.
The Bond Connect Anniversary Summit welcomed prominent industry experts and market practitioners, who shared fresh insights through keynote speeches and lively panel discussions on major developments in the Chinese and global bond and fixed-income markets.
BCCL is a joint venture established by China Foreign Exchange Trade System and HKEX to support Bond Connect-related trading services.
Hong Kong Chief Executive Carrie Lam was guest of honour at the summit, while HKEX Chairman Laura M Cha delivered the opening remarks. People’s Bank of China (PBC) Deputy Governor and Administrator of State Administration of Foreign Exchange of China, Pan Gongsheng, was a keynote speaker, along with Hong Kong Monetary Authority Chief Executive Norman Chan, as well as Securities and Futures Commission of Hong Kong Chief Executive Officer Ashley Alder. HKEX Chief Executive Charles Li was a panel moderator.
During the summit, Mr Pan announced new measures by the PBC to support the sustainable development of the Bond Connect programme.
These measures include:
- expect launch of trade allocation from mid-July
- full realisation of the delivery versus payment settlement system soon
- clarify tax policy for overseas investors as soon as possible
- permit international investors to access repo and derivatives markets
- addition of 10 more Bond Connect dealers to a total of 34
- discounts of up to 50 per cent in Bond Connect transaction fees, and
- cooperation with mainstream international e-trading platforms
Today’s summit also included an awards presentation ceremony, which recognised the contributions and achievements of market participants in the Bond Connect programme.
“Bond Connect is a major milestone in the deepening of the mutual access between the Mainland and Hong Kong’s capital markets. This is the first time eligible foreign investors have been allowed to invest in the Mainland’s interbank bond market through a link connecting the domestic and overseas bond markets. I am very pleased to see the smooth operations of Bond Connect’s Northbound trading since its launch, confirming Hong Kong’s position as the country’s international financial centre as it continues to play a unique and important role in the opening up of the Mainland’s financial market,” said Hong Kong Chief Executive Carrie Lam.
HKEX Chairman Laura M Cha said: “Bond Connect’s operation over the past year has been conducted in a stable and orderly manner, helping drive the further liberalisation of China’s bond market. Foreign investors broadly recognise Bond Connect’s institutional strengths as well as innovative design, and they have expressed a desire to continue investing in China’s bond market. Looking ahead, we are working with our regulators in the Mainland and Hong Kong, as well as financial infrastructure firms, to consider ways to further optimise Bond Connect.”
“As the RMB and Mainland bond market internationalise further, market demand to manage RMB exchange rate and interest rate risk will continue to rise, bringing with it enormous development potential for interest rate and currency products in Hong Kong,” said HKEX Chief Executive Charles Li. “We are committed to providing effective risk management tools for Mainland investors, as well as international investors seeking Mainland investment opportunities, to meet their growing and diversified asset allocation needs.”
The launch of Bond Connect in July 2017 was another significant breakthrough in the opening of the Mainland bond market, as well as an important step in closer interaction and cooperation between the Mainland and Hong Kong.
Market participation in Bond Connect has been growing steadily, with average daily volumes reaching RMB6.55 billion in June 2018, more than double the daily average volumes in the first quarter of the year. For the month of June, trading through Bond Connect reached RMB130.92 billion, nearly double the volumes in May.
In addition, the number of approved overseas institutional investors participating in Bond Connect also continued to increase. As at the end of June, there were 356 approved investors from 21 jurisdictions, compared with 247 at the end of 2017.
Meanwhile, overall foreign holdings in China’s interbank bond market reached RMB1,435 billion at the end of May, an increase of 70 per cent since Bond Connect’s launch.
Laura M Cha, HKEX Chairman, welcomes summit participants
Carrie Lam, Hong Kong Chief Executive, gives her opening address
Pan Gongsheng, Deputy Governor, People’s Bank of China and Administrator of State Administration of Foreign Exchange of China, begins the keynote addresses
Norman Chan, Chief Executive, Hong Kong Monetary Authority, delivers his keynote address
Ashley Alder, Chief Executive Officer, Securities and Futures Commission of Hong Kong, ends the morning’s keynote addresses
Special guests join in the official launch of the summit: (from left): Yang Nong, Deputy Secretary General, National Association of Financial Market Institutional Investors; Miao Jian, Deputy Inspector, Capital Account Management Department, State Administration of Foreign Exchange (SAFE); Zhang Xuguang, Executive Vice President, China Development Bank; Zhang Zhengxin, Deputy Director-General, International Department, People’s Bank of China (PBC); Huo Yingli, Director-General, Monetary Policy Department II, PBC; Ji Zhihong, Director-General, Financial Market Department, PBC; Qiu Hong, Deputy Director, Liaison Office of the Central People's Government in the Hong Kong SAR; Pan Gongsheng, Deputy Governor of PBC and Administrator of SAFE ; Norman Chan, Chief Executive, Hong Kong Monetary Authority; Ashley Alder, Chief Executive, Securities and Future Commission of Hong Kong ; Charles Li, Chief Executive, HKEX; Zhang Yi, President, China Foreign Exchange Trade System (CFETS); Zhou Rongfang, General Manager, Shanghai Clearing House; Yin Jiuyong, Vice President, Agricultural Development Bank of China; Zhang Cuiwei, Executive Vice President of CFETS and Chairwoman of Bond Connect Company; and Mao Zhirong, HKEX’s Head of Mainland Development and Director of Bond Connect Company.
Charles Li, HKEX Chief Executive, chairs the first panel discussion