Market Summary

Yield Movements

Between 1 September and 31 October, local currency (LCY) government bond yields in Hong Kong, China rose for most maturities amid improved economic conditions and interventions by the Hong Kong Monetary Authority to defend the local currency's peg to the United States dollar. Hong Kong, China's gross domestic product growth accelerated to 3.8% year-on-year in the third quarter (Q3) of 2025 from 3.1% year-on-year in the prior quarter, supported by sustained growth in exports and domestic demand.

Local Currency Bond Market Size and Issuance

Strong bond issuance from the private sector drove LCY bond market growth in Q3 2025. Total bonds outstanding reached HKD3,465.9 billion at the end of September, with growth accelerating to 4.7% quarter-on-quarter (q-o-q) in Q3 2025 from 2.0% q-o-q in the previous quarter. Total LCY bond issuance tallied HKD1,581.0 billion, up 9.3% q-o-q on increased corporate bond issuance amid improved economic conditions. Corporate bonds outstanding expanded 11.1% q-o-q to HKD1,877.2 billion on robust issuance while Hong Kong Special Administrative Region bonds outstanding declined 12.4% q-o-q to HKD257.3 billion due to a slowdown in issuance.

Sustainable Bond Market

Sustainable bonds outstanding reached USD45.9 billion at the end of September on a marginal decline of 0.1% q-o-q due to reduced issuance. Issuance in Q3 2025 was down 37.0% q-o-q to USD1.8 billion and was solely driven by the private sector. Green bonds continued to be the predominant bond type, comprising 81.3% of the total. New issuances in Q3 2025 consisted of green and sustainability-linked bonds denominated in foreign currencies.