RMB internationalisation, reliable ratings key to open up PRC bond market

Author: Karry Lai | Published: 10 Jul 2018

It’s been a year since the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBOC) launched the Bond Connect to allow foreign investors to invest in the China interbank bond market. While it has been a welcomed initiative there is still a long road ahead to opening up China’s debt markets, according to panellists at the June 27 Fixed Income Leaders’ Summit in Hong Kong.

Archie Ng, HKMA division head (external department) said that as of the end of May 2018, 315 Bond Connect investors had registered and held almost RMB130 billion ($19.7 billion approximately) in bonds. In the first five months of 2018, daily average trading volume amounted to around RMB3 billion. While there are still cash settlement processes and tax issues with the Bond Connect, he remains confident that these issues will soon be resolved.