Clearstream will flick the switch on a live link with Hong Kong's Central Moneymarkets Unit (CMU) this Monday giving account holders access to the securities held by the global clearing house. The likely result will be an increased local investor appetite for euro denominated bonds.
Speaking about the launch, the executive director of Clearstream in Asia, Philippe Metoudi, says the real-time link is part of the Hong Kong Monetary Authority's strategy to maintain its position as a regional financial centre. "In the past, non-Clearstream account holders in Hong Kong could access our securities through the CMU but only via a global custodian. Now they can go direct."
The bilateral deal will increase Clearstream's customer base in Hong Kong from its existing book of 150 clients to about 350 once CMU customers start using the link.
"Our expectation is that local investors will use this channel as a way of diversifying their portfolios," says Metoudi. "Because of the declining value of the US dollar and the low interest rate environment, investors are looking for other currencies to invest in and one of the markets they are exploring is the euro market."
There are about 250,000 securities lodged with Clearstream and on a busy day the depository can turn over more than one million transactions.
The link with Clearstream comes just a month after the CMU struck a similar a arrangement with Euroclear, the other European-based central securities depository that is active in Asia.