A new channel for mainland investors to purchase overseas bonds opened on Friday amid ongoing concerns surrounding developer Evergrande.
The Southbound Bond Connect is an arrangement that allows institutional investors in mainland China to invest in the Hong Kong bond market "through connection between the Mainland and Hong Kong financial infrastructure services institutions," according to the joint announcement by the People's Bank of China and the Hong Kong Monetary Authority on Sept. 15.
HKMA Deputy Chief Executive Edmond Lau described the opening as a "major breakthrough" which completes the two-way opening of China's bond market through Hong Kong. "I think the biggest benefit would be that it helps significantly enlarge the investor base of our Hong Kong bond market," Lau told CNBC's Emily Tan.
"Mainland investors, they have very high savings rate and they have a need to diversify their risk and asset portfolio and therefore, this is really a good direct and also convenient channel for them to invest into the offshore bond market through Hong Kong," he said. The Southbound Bond Connect is one of multiple "connect" programs that link the mainland markets with Hong Kong. Other similar programs include the Stock Connect, which allows investors in the mainland to trade some stocks in Hong Kong, while also allowing foreign investors to access Shanghai and Shenzhen listed shares in the mainland.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Evergrande stays silent on its $83 million dollar bond interest payment, leaving investors in limboChinese property developer Evergrande has not said whether it will fulfil its interest payments to investors on its U.S.-dollar bond.
Read more »
Mothers Are Postponing the Return to Work. Amazon and Other Companies Are Trying to Bring Them Back.Companies are trying several innovative strategies to make work more workable for mothers looking to re-enter the workforce
Read more »
China's Evergrande meets crucial debt deadline but another loomsChina's Evergrande Group will pay interest due Thursday on one of its bonds, but it's keeping rattled investors guessing about the fate of second, bigger payment due this week.
Read more »
China's pledge to end building coal plants abroad improves Belt and Road's reputation, development bank saysChinese President Xi Jinping said at the United Nations General Assembly that China would not build new coal-fired power projects overseas.
Read more »
Fed officials say tapering ‘may soon be warranted’ and earlier interest hike pencilled inFederal Reserve officials on Wednesday said that a tapering of bond-buying 'may soon be warranted' and they penciled in a rate hike in 2022, earlier than...
Read more »
China Evergrande’s Flagship Business Resolves an Onshore Bond PaymentEmbattled China Evergrande Group’s flagship property business said it would make an interest payment on an onshore bond
Read more »