Trading Scheme Connects with Investors
International investors appear to have voted with their wallets through the latest initiative to further open China’s financial markets.
Bond Connect, a cross-border trading scheme providing access to China’s US$9 trillion bond market via the Hong Kong Exchanges and Clearing (HKEX), saw more than Rmb7 billion (US$1 billion) worth of Chinese mainland bonds traded by international investors on its July launch. Although trading volumes are yet to be released, The Asset reported data from the China Central Depository and Clearing Co – the official bond-clearing house – indicating that overseas investors increased their holdings of mainland bonds by 4.5 per cent in July to Rmb841.5 billion. In its recap of the first month of trading, Bloomberg reported that Bond Connect has also been acting as a channel to bring offshore mainland money back home, from local investors taking advantage of opportunities in domestic credit products.