Despite high expectations for a finance super-highway as part of the Guangdong-Hong Kong-Macao Greater Bay Area, some say the connect schemes are faltering.
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After 40 years of servicing the Asia Pacific region, State Street highlights the key trends it expects to shape the future of the asset management industry.
Another year of travel restrictions would severely test the patience of Hong Kong asset management professionals. But they still have faith in the huge potential of Hong Kong as a gateway for mainland China’s wealth.
The enlargement of the Bond Connect scheme, announced on Wednesday (Sep 15), gives Chinese investors another option for allocating capital offshore.
This month, AsianInvestor is running a series of stories on the decisions driving the fixed income choices of institutional investors as 10-year US treasuries drop further below zero.
Despite the introduction of Bond Connect last year, Beijing still has hurdles to clear if it is to attract more meaningful international flows to its debt market.
China has reportedly reopened the two schemes. This could mean Ucits funds are close to Bond Connect approval and that QDII is set to return, says Andy Seaman of Stratton Street.
Global investor monitoring and testing for the new China access programme is just beginning and early trading has largely relied on Chinese banks. But it's a decent start.
China and Hong Kong need to get their act together if Bond Connect is going to buck a run of disappointing trading links. Investors need to be able to hedge interest rate risk onshore.
China's central bank has clarified operational details of the market access scheme, through which Standard Chartered expects strong early trading in July.
Rating agency Moody’s says offshore renminbi bonds will be marginalised by the imminent China-Hong Kong trading link. Andy Seaman of Stratton Street Capital disagrees.
Big fixed income investors will see the newly approved China-Hong Kong bond trading link as inferior to other access channels, though smaller players should find it useful, say industry experts.