Mainland Investors May Be Able to Soon Start Trading Bonds in Hong Kong

What’s new: Chinese mainland investors will likely be able to start trading offshore bonds in Hong Kong as soon as July through a bond connect program that links the mainland and the southern financial hub, local media reported.

The program’s southbound channel may launch on July 2, following relevant regulations issued in May, the Hong Kong Economic Journal reported (link in Chinese) on Monday, citing unnamed sources.

The southbound channel will allow mainland investors to put money into specific offshore bonds under certain quotas, the report said.

The background: China kicked off the bond connect program in July 2017, opening only the northbound channel at the time, which allows overseas investors to trade bonds on the mainland through Hong Kong.

Market participants have attributed the absence of the southbound channel to regulators’ longstanding concerns over capital outflows, large quantities of which could pose risks to the country’s financial stability.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.

Related: Authorities Discuss Plan for Mainland Investors to Trade Bonds in Hong Kong

Contact reporter Shi Yi (yishi@caixin.com) and editor Lin Jinbing (jinbinglin@caixin.com)

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