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SGX inks pact with Bank of China, CFETS to promote their bond indices outside China

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The Singapore Exchange (SGX) on Wednesday announced that it has signed a strategic cooperation agreement with Bank of China Limited (BOC) and China Foreign Exchange Trade System and National Interbank Funding Center (CFETS) to jointly promote the CFETS-BOC Traded Bond Index and its sub-indices outside of China to international investors.

THE Singapore Exchange (SGX) on Wednesday announced that it has signed a strategic cooperation agreement with Bank of China Limited (BOC) and China Foreign Exchange Trade System and National Interbank Funding Center (CFETS) to jointly promote the CFETS-BOC Traded Bond Index and its sub-indices outside of China to international investors.

Jointly developed and launched by CFETS and BOC, the bond indices are based on the transaction characteristics of various types of bonds and provide a price-level indicator of the China interbank bond market. The SGX has published the bond indices on its website, making it the first exchange to distribute the bond indices outside of China.

The three parties will collaborate to organise activities that promote the development of and increase investor awareness of these bond indices; explore disseminating them via SGX's market data distribution network and using them as a component in the indices calculated by the SGX; and explore the feasibility of developing financial products based on the bond indices to be listed on the Singapore bourse.

"As China forges ahead with the opening up of its financial markets, SGX is well-placed to raise the visibility of the bond indices and facilitate greater global institutional investor interest," said Loh Boon Chye, chief executive officer of the SGX.

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"The distribution of the indices through SGX’s network will also familiarise international investors with Chinese domestic markets. We look forward to closer collaboration between the three organisations and the two countries, so as to enhance cross-border opportunities benefitting both markets."

Said Zhen Mei, general manager and head of global markets at BOC: "The CFETS-BOC bond indices better reflect the market trends and flows of a comprehensive range of China onshore bond products. We hope that international investors will utilise the indices and their related products to participate in investment opportunities and benefit from the opening up of the China bond market."