The yield curve for Hong Kong, China’s Exchange Fund Bills and Notes (EFBNs) rose for most maturities between end-October and end-September, with the exception of maturities at the very short-end of the curve. The 10-year tenor rose the most, rising 26 basis points (bps), followed by the 15-year tenor, which rose 23 bps. Yields in the middle of the curve (3- to 7-years) rose an average of 12 bps. In contrast, yields for the 6-month and 1-year tenor remained unchanged, while shorter-term tenors fell 1-4 bps.

The size of Hong Kong, China’s local currency (LCY) bond market grew 5.7% y-o-y to reach HKD1.3 trillion (USD167.0 billion) at end-June. On a q-o-q basis, LCY bonds outstanding grew at a pace of 1.6%.  Total LCY government bonds outstanding rose 3.8% y-o-y as of end-September, while q-o-q growth was 1.9% while the size of LCY corporate bonds outstanding reached HKD622.9 billion at end-September, reflecting growth of 7.8% y-o-y and 1.2% q-o-q.

On 17 August, the People’s Republic of China’s (PRC) Vice Premier Li Keqiang gave special focus to Hong Kong, China during his keynote speech at the Forum on the 12th Five Year Plan and Economic, Trade, and Financial Cooperation and Development between the Mainland and Hong Kong. He stressed that plans for expanding Hong Kong, China’s already important role as an offshore financial center would give Hong Kong, China an advantage as an offshore renminbi center.