China, Hong Kong’s Bond Connect Uses Tradeweb Platform to Execute First Trades

The Chinese central bank said that a total of $1.03 billion was executed on the first day of trading.

Tradeweb Markets, the online fixed-income trading platform, today said that its trading link has executed the first electronic CNY cash bond transactions on Bond Connect, which enables investors operating in Hong Kong to trade Chinese bonds.

Tradeweb, majority-owned by Thomson Reuters, reported last month that it will connect with China’s CFETS to be the first trading platform to offer a gateway to this initiative, as it looks to help further open China’s domestic bond market, the third largest in the world.

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The release of the Bond Connect scheme is another step toward liberalizing the mainland’s debt market as it exempts investors from direct engagement with the country’s financial regulators. Once trades are executed through Tradeweb, investors can then use global custodians for the settlement process due to a holding arrangement by HKMA’s Central Moneymarkets Unit.

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In a statement, the Chinese central bank said that a total of $1.03 billion was executed on the first day of trading on Bond Connect. Only Northbound trades, which involves trading of Chinese bonds by foreign and Hong Kong investors, were permitted in the initial stage.

Commenting on this, Lee Olesky, CEO of Tradeweb Markets, said: “We are a global leader in electronic fixed income trading, and our fully electronic workflow has already begun to optimize faster and easier access to the Chinese debt market for institutional investors through Bond Connect. The introduction of electronic trading for Chinese bonds internationally is a catalyst for greater efficiency, connectivity and transparency in trading these bonds across a broader network.”

Endre Pedersen, CIO of Fixed Income at Manulife Asset Management, added: “We are gaining streamlined, electronic access to the third largest bond market in the world. Tradeweb and Bond Connect have transformed the operational workflow for trading Chinese bonds, while improving price discovery and connectivity to liquidity providers.”

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