Photo: Participants attend a ceremony held by Hong Kong Exchanges and Clearing Limited to launch the "northbound" Chinese mainland-Hong Kong bond connect scheme in Hong Kong, south China, July 3, 2017.
BEIJING, Aug. 13 (Xinhua) -- Foreign institutions held an all time high 3.77 trillion yuan of bonds on China's interbank bond market by the end of July, reported Xinhua-run China Securities Journal Friday.
The newspaper citing data from Bond Connect Co., Ltd. (BCCL) said that the figure grew 23.4 billion yuan from the end of June, marking the fourth consecutive month of holdings increase by foreign investors.
BCCL is the joint venture established by China Foreign Exchange Trade System (CFETS) and Hong Kong Exchanges and Clearing Limited (HKEX) to support Bond Connect, a mutual market access scheme allowing investors from the Chinese mainland and Hong Kong to invest in each other's bond market. Under the scheme, northbound trading commenced on July 3, 2017, offering overseas investors access to China interbank bond market.
In the first seven months, foreign institutional investors added 512.3 billion yuan of bond holdings on China's interbank bond market, higher than the 484.7 billion yuan of holdings increase in the comparable period of 2020 when they added in total more than one trillion yuan of bonds on interbank market.
By the end of July, their bond holdings at custody with China Central Depository & Clearing Co., Ltd. (CCDC) and Shanghai Clearing House (SHCH) grossed 3.38 trillion yuan and 391.8 billion yuan respectively, according to data with BCCL.
CCDC and SHCH are both central securities depositories in China. CCDC provides registration, custody and transaction settlement services mainly for T-bonds, policy bank bonds, commercial bank bonds and state-owned or controlled enterprise bonds. SHCH provides registration, custody and settlement services for debenture bonds in China.
Industry insiders said that foreign institutions kept adding their holdings of bonds on China's interbank bond market because of the suitable valuation and stable returns of Renminbi-denominated assets and the continuously improved opening-up of China's financial market.
According to a research report with China International Capital Corporation (CICC), foreign institutions added 1.05 trillion yuan of bonds on China's interbank bond market in 2020, of which 570.9 billion yuan are T-bonds and 420.8 billion yuan are policy bank bonds. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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