Market Summary

Yield Movements

Between 2 September and 31 October, local currency (LCY) government bond yields in Hong Kong, China were mostly up amid domestic and external policy developments. Fiscal stimulus measures and monetary policy easing in the People's Republic of China, as well as policy rate reduction in the United States and the subsequent base rate cut by the Hong Kong Monetary Authority were the factors largely affecting yield movements during the review period.

Local Currency Bond Market Size and Issuance

Hong Kong, China's LCY bond market totaled HKD3.0 trillion at the end of September, down 1.7% quarter-on-quarter (q-o-q) due to maturities in Hong Kong Special Administrative Region government bonds and a decline in corporate bonds outstanding. LCY bond issuance tallied HKD1.3 trillion in the third quarter of 2024, down 0.1% q-o-q amid a fall in corporate bond sales. Corporate bond issuance continued to contract, falling 7.4% q-o-q as geopolitical tensions and interest rate uncertainties dampened investor confidence.

Sustainable Bond Market

Green bond instruments issued by the public sector continued to comprise a majority of Hong Kong, China's sustainable bond market. At the end of September, sustainable bonds outstanding totaled USD46.6 billion, up 11.6% q-o-q on robust issuance. Among emerging East Asian markets, Hong Kong, China's sustainable bond market had one of the highest shares of foreign-currency denominated sustainable bonds as the government issues multi-currency green bonds to promote sustainable finance and strengthen its position as a sustainable finance hub.