BNP Paribas today announced it has been named a market maker for the Southbound leg of the China-Hong Kong Bond Connect Scheme, which officially launched today in Hong Kong. The first step in a move to open Hong Kong’s bond market to Chinese mainland investors, Southbound Bond Connect simplifies access and should encourage further liberalisation.
Since Bond Connect’s Northbound route first launched in July 2017, China’s bond market has taken over from Japan as the world’s second largest behind that of the United States. Foreign participation in China’s domestic market has more than doubled during this period, alongside the inclusion of Chinese bonds in major global indices.
“Today’s launch of Southbound Connect for CNH bonds demonstrates China’s commitment to an orderly opening of its outbound investment markets and gives confidence that further reform should soon follow,” said Richard Cohen, Head of Primary & Credit Markets at BNP Paribas.
“BNP Paribas has been one of the most active international banks acting as market maker in the Northbound BondConnect and Direct CIBM programs, and now we are pleased to be among the first batch of market makers in Southbound BondConnect,” said George Sun, Head of Greater China, Global Capital at BNP Paribas.
The Bond Connect Scheme complements the existing QDII system to govern Chinese overseas investments. It is expected to smooth and streamline access to the Hong Kong market for Chinese domestic investors.
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