The investor base of Hong Kong, China primarily comprises institutional investors, although the Government has taken steps to open bond investing to the retail market.

Principal institutional investors in the Hong Kong, China debt market are divided into three sectors: pension fund system of the Mandatory Provident Funds; banking institutions, which represent the largest investor base in Hong Kong, China; and government-related institutions, including the Housing Authority and the School Fund.

In an effort to promote retail investor participation, the Hong Kong Monetary Authority (HKMA) launched the Retail Exchange Fund Notes Programme in August 2003, which allocates bond issuance to individual investors. The Hong Kong Mortgage Corporation (HKMC) continues to pioneer development of the retail bond market through its Retail Bond Issuance Programme.

Pension Funds

The Mandatory Provident Fund (MPF) and all pension plans under the Occupational Retirement Schemes Ordinance (ORSO) are major investors in the bond market. These funds provide savings schemes for the retirement of residents of Hong Kong, China. The value of total pension assets, including MPF and ORSO schemes, stood at HKD475 billion as of September 2008.

Insurance Companies

Hong Kong, China has a highly competitive insurance market, comprising 174 authorized insurers in 2008. Leading industry players—such as Bank of China Group Insurance, American International Assurance, Manulife, HSBC Life, and Prudential Assurance—invest a portion of their assets in the local bond market.

Asset Management Companies

There are 2,231 unit trust and mutual funds in Hong Kong, China, 342 of which are bond funds. Leading fund managers include the world’s major banks and institutional investors, such as Goldman Sachs Asset Management International and PIMCO funds.