Hong Kong and Macau Bond Markets Link to Drive Growth in Greater Bay Area

Enhancing Financial Connectivity in the Greater Bay Area

The monetary authorities of Hong Kong and Macau are taking bold steps to establish a direct link between their clearing, settlement, and custodian systems. This linkage is designed to promote the growth of bond markets and deepen financial cooperation under the Greater Bay Area initiative.

Details of the Bond Market Link

The Hong Kong Monetary Authority (HKMA) plans to connect its Central Moneymarkets Unit (CMU) with the central securities depository in Macau. This collaboration will allow investors to efficiently clear, settle, and hold bonds in each other's systems, facilitating greater financial interaction.

Opportunities for Investors

• Macau's bond market is valued at US$22 billion.
• Hong Kong's bond market significantly outweighs it at US$421 billion.
• This initiative is expected to boost liquidity, enhance post-trade transparency, and expand access to diverse financial products for regional investors.

According to Eddie Yue Wai-man, HKMA's chief executive, this move is a significant step towards establishing the CMU as a key international depository in Asia.

Maximizing Regional Potential

Benjamin Chan, chairman of the Monetary Authority of Macao (AMCM), emphasized that this development supports Macau's economic diversification efforts while reinforcing its role as a connector between China and Portuguese-speaking countries.

This initiative signifies a milestone in the financial collaboration fostered in the Greater Bay Area, initiated by Beijing five years ago, aiming to integrate Hong Kong, Macau, and nine cities in Guangdong province into a formidable economic powerhouse.