Chinese treasury bond futures gain ground on debut
The September contract opened at 106.685 yuan – up about 1.2 percent.
Financial Secretary Paul Chan said the launch of the treasury bond futures marks another milestone in serving the developmental needs of the country.
“This is an important step in supporting the long-term development of the offshore renminbi bond market and the broader process of the internationalisation of renminbi,” he said in a listing ceremony.
The treasury bonds, Chan added, has filled in another key piece of the puzzle, providing standardised, exchange-traded, tradeable and priceable offshore hedging tools for Chinese government bonds, making the risk management system for offshore renminbi fixed-income instruments more complete.
He said Hong Kong has the responsibility and confidence, given the nation’s solid support, to work alongside all market players to steadily advance along this path, deepen it and go the distance, contributing Hong Kong’s strength to the country’s goal of building a financial powerhouse.
The five-year fixed rate bond means offshore investors can hedge yuan interest rate risk – as well as gain exposure to the renminbi bond market.
Hong Kong Exchanges and Clearing chairman Carlson Tong said the new product would benefit international investors.
“This gives international investors listed centrally clear exposure to Chinese government bond yields, enables them to open, to hedge, to clear positions entirely offshore through the same accounts and workflow they already use for Hong Kong listed derivatives,” he said.
China Securities Regulatory Commission chairman Wu Qing said the move would reinforce Hong Kong’s status as an offshore renminbi trading centre.
“From a long-term perspective, the introduction of this important product will further enrich the coverage of offshore renminbi, strengthen Hong Kong’s role as a global offshore renminbi business hub, and also better enhance the performance of financial services in serving the real economy.”
He also said the two markets would launch more exchange-traded fund products tracking mainland assets.
Edited by Tony Sabine
