Mainland investors soon to trade offshore bonds through Hong Kong

Chinese mainland investors will be able to trade offshore bonds through Hong Kong from Sept 24, enabled by the launch of Southbound Trading under Bond Connect, as jointly announced by the People's Bank of China and the Hong Kong Monetary Authority on Wednesday.

The launch of Southbound Trading marks another milestone of mutual access between Hong Kong and the Chinese mainland capital markets, followed by the launch of Northbound Trading in July 2017 and Wealth Management Connect earlier this month, said Eddie Yue, chief executive of the Hong Kong Monetary Authority.

Yue expressed his confidence that Southbound Trading will further deepen the opening up of the mainland financial market and enhance the vibrant bond market landscape in Hong Kong, which will help consolidate Hong Kong's unique and irreplaceable status as an international financial center.

Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor said the two-way connection of the bond markets between Hong Kong and the Chinese mainland will "set a new milestone for meeting the objectives laid down in the 14th Five-Year Plan and reinforce Hong Kong's status as an international financial center".

"Such positive impacts are fully illustrated in the Northbound Trading under Bond Connect, with foreign holding of mainland onshore bonds increased from about 880 billion yuan ($137 billion) in 2017 to 3,800 billion yuan as of August, and the average daily turnover increased by 17 times over the same period," she said.