Flagship global roadshow series returns; offshore investors convene to discuss opportunities and challenges of investing in China
Bloomberg’s “The New Silk Road: Expanding Horizons” roadshow in Hong Kong on June 13, 2023 convened nearly 150 market participants to discuss the latest developments in the opening-up of China’s financial market, as well as the changing opportunities and challenges of investing in China. It was the first event of the series to take place in 2023 and resumes Bloomberg’s flagship offshore China investor roadshow program, first established in 2012.
Bing Li, Head of APAC, Bloomberg, said: “despite the market disruption of recent years, the door to China’s financial markets has remained broadly open. However, continuing uncertainties and geopolitical headwinds have increased complexity and global investors are keen to better understand China’s financial markets and the opportunities that lay ahead. Now more than ever, the financial sector can play an important role in finding areas of common interest between divergent economies. The relative success of financial integration between Chinese and global financial markets can contribute to the next wave of growth across world markets, and the basis for greater global cooperation.”
Despite increased bond market access through new channels, and significant growth with expanded foreign holdings and surging transaction activities in the past years, foreign participation in Chinese bond markets still has considerable room to grow.
“China’s financial opening-up is set to continue and Swap Connect is just the latest initiative to broaden investor appeal. We have launched various innovative Connect schemes to meet the demanding workflows of global investors and we appreciate and welcome their feedback to help us improve the schemes,” said Dr. Xiangqian Lu, General Manager, RMB Market Department, China Foreign Exchange Trade System (CFETS) during his keynote speech. “We have been closely collaborating with Bloomberg and other international trading platforms to improve our trading infrastructure and systems, bringing better efficiency and lower cost to investors. We will continue to advance China’s financial market, facilitating global investors who are keen to participate in a greater variety of business opportunities within the interbank markets.”
Swap Connect, the first-of-its-kind derivatives trading link offering offshore investors access to China’s onshore interest rate swap markets, stimulates foreign participation in China’s bond markets, citied by the speakers at the event, including representatives from China Foreign Exchange Trade System (CFETS), The Stock Exchange of Hong Kong (HKEX), Bank of China, Industrial and Commercial Bank of China, Standard Chartered, Guotai Junan Securities and Bloomberg.
More than 100 attendees participated in a survey at the event and cited Swap Connect’s role as an additional tool to hedge onshore interest rate risks as the biggest benefit of the scheme (76%) followed by providing access to active onshore dealers and their real-time pricing (11%). While market participants expect the scheme to be further optimized, OTC Clear membership (48%), complex clearing and settlement arrangements (41%) and limited scope of eligible instruments (29%) were the main reasons holding investors back from participating at the moment.
As a PBOC approved third-party electronic trading solutions provider for northbound Swap Connect, Bloomberg launched a solution last month to facilitate offshore market participants’ trading in IRS via Swap Connect, based on the system connectivity with CFETS.
Bloomberg provides a range of powerful trading and trade-related solutions around the world. It also offers a full suite of solutions for China’s bond markets and cross-border investment. For more information, please visit RMB<GO> in the Bloomberg Terminal.
Bloomberg
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