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Treasury & Capital Markets
BOC, ICBC issue first bonds under direct HK-Macau market link
Deals mark a milestone in financial cooperation in the Greater Bay Area
The Asset   24 Jan 2025

Hong Kong and Macau have launched the first-ever bond issuances under a new direct settlement and trading link between the two markets.

These included 1 billion yuan ( US$137.81 million ) two-year fixed rate notes issued by Bank of China, Macau Branch, under its US$40 billion medium-term note programme, and US$250 million three-year floating rate notes issued by Industrial and Commercial Bank of China, Macau Branch, under its US$20 billion global medium-term note programme.

Both series of notes are listed on the Chunghwa ( Macau ) Financial Asset Exchange and issued to Hong Kong and Macau investors. Linklaters acted as international legal adviser on the transactions.

Earlier this week, the Hong Kong Monetary Authority ( HKMA ) and the Monetary Authority of Macao ( AMCM ) launched the linkage between the Central Moneymarkets Unit ( CMU ) operated by CMU OmniClear Limited, a wholly-owned subsidiary of the Exchange Fund, and the central securities depository ( MCSD ) operated by Macao Central Securities Depository and Clearing Limited, a wholly-owned subsidiary of the AMCM. The direct linkage aims to promote the development of the bond markets in the two regions.

Under the direct link, participants will be able to transfer, settle and hold debt instruments held in the other system through their existing CMU or MCSD accounts. The recent launch of the CMU-MCSD link enables investors from both markets to participate in each other’s bond market with greater ease and efficiency, marking another milestone in financial cooperation in the Greater Bay Area.

"To enhance the competitiveness of Hong Kong as an international fnancial centre, the HKMA has established connectivity with various neighbouring fnancial markets over the years, and continues to explore direct linkages with other central securities depositories,” says HKMA chief executive Eddie Yue. “The direct linkage showcases Hong Kong’s role as a ‘super-connector’ and represents a major step towards developing the CMU into an international CSD in Asia.”

AMCM chairman Benjamin Chan adds: “The official launch of the direct linkage between the bond markets of Macao and Hong Kong achieved the first connectivity of Macao’s bond market infrastructure established with a CSD located outside of Macao. This will provide international investors, including those from Portuguese-speaking countries, with a convenient channel to participate in the bond markets of Macao and Hong Kong, further strengthening Macao’s function as the financial services platform serving China and Portuguese-speaking countries.

"The AMCM will continue to establish connectivity with the bond markets in mainland and international markets, to gradually expand new financial services and to support the development of appropriate economic diversification for Macao."