03 July 2017
Hong Kong
Reporter: Drew Nicol

China closes first trading day on Bond Connect

The first direct and fully electronic renminbi (CNY) cash bond transactions between offshore investors and mainland Chinese liquidity providers on Tradeweb’s Bond Connect were executed today (3 July) via its trading link.

The People’s Bank of China reported that RMB 7.05 billion (USD 1.03 billion) was executed on the official first day of northbound trading on Bond Connect, with 70 institutions successfully completing 142 transactions with 19 onshore market makers.

Tradeweb Markets is a global marketplace for electronic fixed income, derivatives and exchange-traded funds trading that has become the first offshore trading platform to connect with the China foreign exchange trade system (CFETS).

The partnership sets Tradeweb Markets as the main trading interface for offshore investors to access the new ‘Bond Connect’ between China and Hong Kong, allowing foreign investors access to the third-largest bond market in the world.

More than 70 institutions from over 10 countries onboarded last week to access Bond Connect through Tradeweb.

Bond Connect was launched by the People’s Bank of China and the Hong Kong Monetary Authority in May, with the aim of enabling investors in mainland China and overseas to trade bonds in each other’s markets.

Lee Olesky, CEO of Tradeweb Markets, said: “We are a global leader in electronic fixed income trading, and our fully electronic workflow has already begun to optimise faster and easier access to the Chinese debt market for institutional investors through Bond Connect.”

“The introduction of electronic trading for Chinese bonds internationally is a catalyst for greater efficiency, connectivity and transparency in trading these bonds across a broader network.”

Bond Connect user Endre Pedersen, senior managing director and chief investment officer of fixed income for Asia (excluding Japan) at Manulife Asset Management, said: “We are gaining streamlined, electronic access to the third largest bond market in the world."

"Tradeweb and Bond Connect have transformed the operational workflow for trading Chinese bonds, while improving price discovery and connectivity to liquidity providers."

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