Hong Kong to launch China treasury bond futures in Q1, 2024
HONG Kong Futures Exchange said on Tuesday (Nov 28) it plans to launch 10-year offshore China treasury bond futures in the first quarter of next year, offering a fresh risk management tool for offshore investors.
The China Ministry of Finance Treasury Bond Futures Contracts will trade on Hong Kong Futures Exchange. The actual launch date is subject to regulatory approval and market readiness, Hong Kong Futures Exchange said in a statement.
The introduction of treasury bond futures is in response to the need for offshore investors to manage the interest rate volatility of bond assets denominated in China’s renminbi currency, which have seen a surge of international capital inflows.
“Being the sole Chinese government bond futures contract in the offshore market, it aims to address the growing interest (in) rate risk management and trading demand from offshore investors,” Hong Kong Futures Exchange said.
Hong Kong Futures Exchange is fully owned by Hong Kong Exchanges and Clearing Limited (HKEX).
Nicolas Aguzin, chief executive of HKEX, said last week the introduction of treasury bond futures will add to the exchange operator’s expanding suite of China-related risk management tools and “help drive market liquidity and support the further development of Hong Kong’s RMB ecosystem”.
The launch follows a six-year hiatus since HKEX introduced pilot five-year China Ministry of Finance Treasury bond futures during April to December 2017. The trading of these futures was suspended subsequently to optimize the scheme.
China’s bond market outpaced Japan to become the world’s second largest in 2019. REUTERS
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