Author: Chief China Economist's Office, Hong Kong Exchanges and Clearing Limited
REPORT SUMMARY
Bond issuance has been prevalent incorporate financing activities in recent years. Retail bond issuance serves as an alternative source of financing for companies looking to access a broader fundingstream. Frominvestors’ perspective, it also provides a channel to address the demand from public investors for greater access to fixed-income products. As a result of the continuous growth of Hong Kong’s bond market and its high degree of availability to global issuers and investors, particularly for access to bonds denominated in multiple currencies, more governmental or corporate entities maybe attracted to retail bond issuance in Hong Kong, so as to build up a wider investor base. One example is the recent offering of bonds issued by Agricultural Development Bank of China, one of China’s state-owned corporations with sovereign rating, conducted through the exchange’s securities settlement system --Central Clearing and Settlement System -- to public investors. To provide market participants with abetter understanding of retail bond offering in Hong Kong, this paper gives adetailed introduction of the retail bond offering approaches in Hong Kong, including the issuing channels, the listing requirements and the post-trade settlement process.