Standard Chartered started trading bonds in China
2023.01.05 00:13
Standard Chartered started trading bonds in China
Budrigannews.com – (OTC:) Standard Chartered The China division of Plc announced that it had become the first foreign bank to trade treasury bond futures in the nation whose capital markets are being deregulated.
After months of foreign capital outflows from China’s $20 trillion bond market, the move comes as China intensifies efforts to attract international investors.
Standard Chartered Bank (China) Ltd. announced in a statement on Wednesday that, with regulatory approval, it had successfully completed its first treasury bond futures transaction in China.
The bank stated that China’s opening of the market will enable foreign investors to better participate in its onshore bond market and promote yuan internationalization. Treasury bond futures are a crucial tool for managing interest rate risks.
Benjamin Hung, the company’s Asia chief executive officer, stated, “We believe that the depth and breadth of global investors’ participation in China’s capital market will continue to increase” as more comprehensive risk management tools become available.
During a 10-month period of outflows, international institutional investors had sold off a net 740 billion yuan (107.48 billion USD) worth of Chinese bonds due to concerns about China’s economy, geopolitical tensions, and U.S. interest rate premiums over China.
At the end of November, foreign holdings of yuan-denominated bonds traded on China’s interbank market totaled 3.33 trillion yuan, or less than 3% of the market’s total value.
The introduction of bond futures trading by Standard Chartered comes nearly three years after China made it possible for insurers and banks to enter the market for the first time, selecting its top five banks for an initial pilot program.
Jerry Zhang, vice chairman of the China unit, stated, “China’s unwavering efforts towards expanding its opening, especially the continuous opening of the financial markets at a high standard, provides tremendous opportunities for Standard Chartered.”
Standard Chartered announced in February 2022 that it would invest $300 million in businesses related to China over the course of the next three years and double the relevant profit contribution by the end of 2024.
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