Bank of China and FTSE roll out RMB bond index series

Oct 27th, 2013 | By | Category: Fixed Income

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Bank of China (Hong Kong) (BOCHK) and FTSE Group have announced the official launch of the FTSE-BOCHK Offshore RMB Bond Index Series, a series of indices measuring the performance of RMB-denominated bonds issued and settled outside the Mainland of China.

Bank of China and FTSE roll out RMB bond index series

The FTSE-BOCHK Offshore RMB Bond Index Series offers a unique benchmark to meet the increasing global demand for RMB-linked fixed income products.

The index series combines BOCHK’s unique positioning in the offshore RMB market with FTSE’s expertise in indexing.

The series includes a benchmark index, with a number of sub categories, which allow market participants to group the market by type of issuer, outstanding maturity and credit rating.

As well as providing a gauge of the market, the series offers a unique benchmark to meet the increasing global demand for RMB-linked fixed income products, such as exchange-traded funds (ETFs).

Mr Mark Makepeace, Chief Executive, FTSE Group, said, “The FTSE-BOCHK partnership strongly positions us in the growing offshore RMB business. FTSE is a leading provider of China-linked indices and we have also been proactively increasing our range of fixed income index solutions. We are delighted to be working with BOCHK to create benchmark indices to support market demand for RMB-linked fixed income products. ”

Dr Au King Lun, Chief Executive Officer of BOCHK Asset Management, added, “We are honoured to be the advisor of this milestone cooperation. According to the Bank for International Settlements’ latest report, the trading of RMB has more than tripled over the past three years, to US$120 billion a day in 2013. It now ranks the ninth most traded international currency.”

He continued: “With the increasing significance of RMB, we will see further development of RMB business globally. RMB is fast becoming a major currency not just for trading, but also for investment. The demands for RMB fixed income products as wealth preservation and portfolio diversification tools are expected to grow rapidly. This is evidenced by the more than 8-fold increase in the market capitalisation of the offshore RMB bonds market in Hong Kong since December 2010.  In this regard, the launch of our Index Series will further facilitate the transaction and circulation of RMB bonds, as well as the steady development of the RMB bonds market globally.”

The FTSE-BOCHK Offshore RMB Bond Index Series is the latest in the range of fixed income index solutions provided under FTSE TMX Global Debt Capital Markets, a joint venture between FTSE and TMX Group’s information services division, TMX Datalinx.

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