International investors’ only access
point to China’s domestic bond markets until now
has been through the RQFII [renminbi qualified foreign
institutional investor] programme. A potential Bond Connect
could open the market.
The RQFII scheme was introduced in 2011 to allow institutional
investors access to China’s interbank bond market.
It was originally for Hong Kong investors only, but quotas have
now been granted to countries vying to become renminbi hubs,
including Qatar, Paris, Frankfurt and Canada.
Another step to opening the market may be the
introduction of a Bond Connect, following the recent success of
the Hong Kong – Shanghai Stock Connect.
But it’s unclear how that would
operate. Panellists speaking at the Asia Securities Industry
and Financial Markets Association’s (Asifma)
offshore renminbi conference yesterday noted that the Stock
Connect structure, which has worked for equities, may not
necessarily work for bonds.
Lachlan Campbell, COO at fixed income...