Hong Kong Plans Expand Bond Connect in July, HKEJ Reports

Hong Kong plans to expand its trading link with the mainland to include southbound flows on bonds in early July, the Hong Kong Economic Journal reported, citing an unidentified source.

The southbound link will have quotas in place and only allow trading in certain eligible bonds, the HKEJ reported on Monday.

Hong Kong has a trading link with mainland China for investors on both sides to buy stocks in respective markets and has since 2017 allowed trades in mainland Chinese bonds. At the time, the aim in Hong Kong was also to allow mainland investors to buy bonds in Hong Kong.

The city’s de facto central bank, Hong Kong Monetary Authority, and the People’s Bank of China in December formed a working group to study allowing southbound flows in bonds. In a speech in February, Hong Kong’s Financial Secretary Paul Chan said the city targets to open southbound bond trading “within this year.”

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A spokesman for the HKMA on Monday confirmed that work is in progress on the southbound bond connect study and that it “will inform the market with updates in due course.”

Spokespeople for Hong Kong Exchanges & Clearing Ltd. and the city’s Financial Services and Treasury Bureau weren’t immediately available to comment.

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