The Hong Kong Monetary Authority has established a HK$100 billion green bond programme, the world’s largest sovereign green bond programme, which will help attract more Chinese and international issuers and investors to the city.
So China’s transition to a lower-carbon economy and the development of global market standards in Environmental, Social & Governance (ESG) investments will be another key plank to Hong Kong’s position as a global bond centre.
Improving credit analysis
International rating agencies Fitch Ratings, Moody’s and S&P have been taking concrete steps to improve their research, analysis and access to the issuers in China as bond defaults are slowly rising.
The three rating agencies have applied to the regulator to operate independent entities in China with S&P going further to secure approval to rate domestic bonds. These developments are all key towards greater credit differentiation in both the onshore and offshore bond markets.
Hong Kong is uniquely positioned for both Asian investment dollars diversifying to global bond markets such as Australia and the US, as well as for global investors raising their weightings to China and Asian fixed income markets.
Anshul Sidher is Head of Trading and Markets Asia at ANZ
This is an edited version of comments made at the 6th Annual RMB Fixed Income & Currency Conference in Hong Kong on April 2, organised by stock market and futures operator HKEX