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Hong Kong Exchanges & Clearing Ltd. is planning changes to the gateway to China’s $10 trillion bond market, though one senior industry figure says investors will still want more.
The bond connect, which allows investors to buy local debt in mainland China via Hong Kong, started in July. The program was modeled on the successful stock connects that link the exchanges in Shanghai and Shenzhen with Hong Kong.
Bond trading is so far only one-way, from the former British colony into the mainland. While trading data for the link isn’t available, total foreign flows into China’s bond market last month were 42.9 billion yuan ($6.8 billion) compared with 38.7 billion yuan in June. China had approved 247 investors to use the system as of Dec. 31, according to the China Foreign Exchange Trade System.
Julien Martin, general manager of Bond Connect Co., a joint venture between HKEX and CFETS that handles connect-related trading services, said in an interview that there are several changes in the works for the system:
