Hong Kong Exchanges and Clearing (HKEX) has announced plans to launch China treasury bond futures in Hong Kong, subject to regulatory approval.
The addition of these treasury bond futures will help regional and global investors interested in accessing China manage their interest rate and investment risks more effectively, according to HKEX.
The launch will also help promote international participation in China’s equities and fixed-income markets and increase investment and risk management opportunities in Hong Kong’s markets.
Bond Connect, which was launched in 2017 as part of HKEX’s mutual market access programme with Mainland China, has helped drive international participation in China’s bond market.
Elsewhere, Swap Connect, which launched in May, has helped international investors tap the onshore RMB interest rate swap market.
This latest development from HKEX follows the launch of Hong Kong Dollar (HKD)-Renminbi (RMB) dual counter model and a dual counter market making programme in its securities market – in a bid to expand trading of RMB-denominated Chinese stocks.
HKEX stated that it is now undertaking relevant preparations ahead of the launch of China treasury bond futures, with implementation details and an official launch date to be announced at a later stage.
“The launch of Treasury Bond Futures is an exciting new milestone that adds to HKEX’s expanding suite of China-related risk management tools, as well as our overall FIC offering, providing investors with even greater choice and opportunity,” said Nicolas Aguzin, chief executive of HKEX.
“These unique new T-bond futures will help drive market liquidity and support the further development of Hong Kong’s RMB ecosystem, cementing the city’s role as the world’s leading offshore RMB hub. We look forward to working closely with the Securities and Futures Commission and all our partners to ensure the successful rollout of this exciting new risk management tool, as we connect China and the world.”