HSBC’s asset management unit in Hong Kong has received a quota of CNY800 million (US$130.75 million) to invest onshore through the Renminbi Qualified Foreign Institutional Investor scheme.
HSBC plans to use the quota to invest in fixed income securities in mainland China and will launch a corresponding product following regulatory approval.
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The product will be available to both its retail and institutional clients in Hong Kong.
China’s securities regulatory authority has expanded the range of financial institutions operating in Hong Kong to channel offshore yuan funds into mainland stock and bond markets as Beijing works to broaden its RQFII trial program and boost domestic capital markets.
With CNY24.2 trillion in size, the onshore Chinese fixed income market has been growing strongly since 2000.
The market is expected to further expand as local corporations in China continue to raise funds through bond issuance due to continued growth of the Chinese economy and the government’s effort in promoting the debt capital markets as an alternative to bank finance.
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