The China Development Bank (CDB) announced on Monday the subscription result of the first issue of renminbi (yuan) bonds in Hong Kong, which reflected a strong response from both retail and institutional investors, with an oversubscription rate of nearly two times.
The Hong Kong Monetary Authority (HKMA) said it was pleased with the successful launch of the renminbi bond business in Hong Kong and the smooth operation of the subscription process.
Commenting, Joseph Yam, Chief Executive of the HKMA, stated that: "The encouraging subscription result of CDB's renminbi bonds highlight the strong demand of investors in Hong Kong for renminbi-denominated investment instruments, including high-quality renminbi bonds. The success of the first issue of renminbi bonds forms a good basis for the further development of the renminbi bond market in Hong Kong. It has also opened up a new channel for financial intermediation between Hong Kong and the Mainland."
To facilitate the issuance and trading of renminbi bonds in Hong Kong, the Real Time Gross Settlement system and Central Moneymarkets Unit have been upgraded to handle the related settlements of renminbi funds and trading of renminbi bonds respectively. The newly introduced renminbi interbank transfer service and use of renminbi cheques in Hong Kong have operated smoothly during the subscription process, signifying the enhancement of the capabilities of local banks in handling renminbi financial transactions.
The HKMA also welcomed the work being undertaken by the Treasury Market Association on the arrangements for renminbi bond price fixing and repo documentation, which will be conducive to the development of a secondary market for renminbi bonds in Hong Kong.
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