China and Hong Kong launch a long-awaited ''Bond Connect'' programme, linking China's $9 trillion bond market with overseas investors, the latest step in Beijing's efforts to liberalise and strengthen the country's capital markets. Ciara Lee reports.
Linking its 9 trillion dollar bond market with overseas investors - Beijing's latest step to strengthen China's capital markets. China and Hong Kong launch the long-awaited "Bond Connect" programme to coincide with the 20th anniversary of Hong Kong's handover to Chinese rule. (SOUNDBITE) (English) HONG KONG CHIEF EXECUTIVE CARRIE LAM, SAYING: "Bond Connect marks another new chapter in the development in the access of mutual capital market access between the mainland and Hong Kong." The trading will initially commence "Northbound", meaning foreign investors can buy and sell Chinese bonds. Beijing has long been keen to increase foreign participation in its bond market, the world's' third-largest, where overseas holdings were less than 2 percent. (SOUNDBITE) (English) HONG KONG STOCK EXCHANGE CHAIRMAN, CHOW CHUNG KONG SAYING: "I expect it to become the most significant channel facilitating new international access and participation in China's inter-bank bond market and will enhance its price discovery and liquidity." Media reports suggest 20 market makers for the bond connect scheme had been approved, including 14 Chinese and six overseas institutions. But the launch had little immediate impact on the market. The yuan weakened against the dollar in Monday trade. Some analysts though say the programme is more about offering support for the Chinese currency in the longer term.