Market Summary

Yield Movements

Between 1 December 2024 and 28 February 2025, local currency (LCY) government bond yields in Hong Kong, China fell for all tenors except the 3-year and 10-year bonds. The decline in most LCY government bond yields largely tracked movements in United States Treasury yields, while the yield hikes for the 3-year and 10-year bonds were driven by increased supply from new issuances under the Infrastructure Bond Programme.

Local Currency Bond Market Size and Issuance

The LCY bond market rebounded in the fourth quarter (Q4) of 2024, rising 4.9% quarter-on-quarter (q-o-q) to HKD3.1 trillion after contracting 1.7% q-o-q in the prior quarter. LCY bond issuance jumped 10.4% q-o-q to HKD1.4 trillion, fueled by increased issuance of Hong Kong Special Administrative Region government bonds and corporate bonds. Issuance of Hong Kong Special Administrative Region government bonds jumped to HKD83.3 billion, as issuances under the Infrastructure Bond Programme started during the quarter. Corporate bond sales rebounded, rising 17.3% q-o-q in Q4 2024 on renewed investor optimism amid improved economic conditions. 

Sustainable Bond Market

A majority of Hong Kong, China’s sustainable bond market comprised green bonds instruments issued by the public sector and denominated in a foreign currency. At the end of December 2024, sustainable bonds outstanding totaled USD48.1 billion on growth of 3.2% q-o-q. Over 70% of outstanding sustainable bonds have remaining maturities of up to 5 years and the size-weighted average tenor of outstanding bonds was 4.4 years. In Q4 2024, all sustainable bond issuances (USD3.0 billion) were social bonds from the private sector.