Hong Kong to link its bond market with Macau to create deeper, bigger hub for debt finance

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The Hong Kong Monetary Authority (HKMA) will link its Central Moneymarkets Unit (CMU) to Macau Central Securities Depository and Clearing.

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Aileen Chuang

Published: 6:30pm, 16 Sep 2024Updated: 6:39pm, 16 Sep 2024

The monetary authorities of Hong Kong and Macau will establish a direct link between their clearing, settlement, and custodian systems to promote the development of bond markets and deepen financial cooperation under the Greater Bay Area initiative.

The Hong Kong Monetary Authority (HKMA) will link its Central Moneymarkets Unit (CMU) to the central securities depository unit under the Macau Central Securities Depository and Clearing for investors to clear, settle and hold bonds lodged in each other’s systems, according to a joint announcement.

The official launch date and detailed arrangements for the direct linkage will be announced in due course, according to the announcement. Macau’s bond market is US$22 billion in value, while Hong Kong’s market is almost 20 times bigger at US$421 billion, according to Bloomberg’s data.

“Fostering connectivity between the bond market infrastructures in Hong Kong and Macau is a major manifestation of the synergistic development of the financial markets in the Greater Bay Area, and will develop CMU into an international [central securities depository] in Asia, leveraging its role as a superconnector,” said the HKMA’s chief executive Eddie Yue Wai-man.

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Macau’s special administrative region government has been diversifying its economy and fostering diversity within the financial ecosystem, with the bond market serving as “the crucial cornerstone”, according to Benjamin Chan, chairman of the Monetary Authority of Macao (AMCM).