General Announcement::ICBC, CCDC & SGX partner to promote ChinaBond-ICBC Bond Indices to global investors

Issuer & Securities

Issuer/ Manager
SINGAPORE EXCHANGE LIMITED
Securities
SINGAPORE EXCHANGE LIMITED - SG1J26887955 - S68
Stapled Security
No

Announcement Details

Announcement Title
General Announcement
Date &Time of Broadcast
25-Nov-2019 17:29:35
Status
New
Announcement Sub Title
ICBC, CCDC & SGX partner to promote ChinaBond-ICBC Bond Indices to global investors
Announcement Reference
SG191125OTHR69ZB
Submitted By (Co./ Ind. Name)
Jo-Ann
Designation
Senior Associate, Marketing & Communications
Description (Please provide a detailed description of the event in the box below)
- ICBC and CCDC have launched ChinaBond-ICBC RMB Bond Indices for institutional investors investing in RMB bonds in China
- SGX will be the first exchange to display these bond indices outside of China
- The three parties will explore the feasibility of developing index fund products using the Bond Indices as the underlying, to be listed on SGX

Industrial and Commercial Bank of China (ICBC), China Central Depository & Clearing Co., Ltd (CCDC) and Singapore Exchange Limited (SGX) have signed a memorandum of understanding (MOU) to jointly promote the newly-launched suite of ChinaBond-ICBC RMB Bond Indices - comprising ChinaBond ICBC Key Terms Treasury Bond Index, ChinaBond ICBC 1-5 year Key Terms Policy Bank Bond Index and ChinaBond ICBC 3-5 year Credit Bond Index (Bond Indices) - which will provide another avenue for international investors to tap on investment opportunities in China, while giving impetus to China's efforts to internationalise the RMB.

The Bond Indices are developed by ChinaBond Pricing Center Co., Ltd (CBPC), a subsidiary of CCDC, together with ICBC. The indices cover large size, highly-liquid treasury bonds, policy bank bonds as well as mainstream securities such as credit bonds. Hence, they effectively characterise the China Interbank Bond Market (CIBM) from multiple dimensions and can be used as a performance benchmark for investing in RMB bonds in China.

As part of the MOU, ICBC, CCDC and SGX will jointly increase investor awareness of the Bond Indices via educational sessions and publicity activities. SGX will be the first exchange to display the Bond Indices outside of China, by publishing the Bond Indices on SGX's website (https://www2.sgx.com/indices/chinabond-icbc-rmb-bond-indices). The Bond Indices will also be published on the official websites of CBPC and ICBC.

The three parties will explore the feasibility of developing financial products using the Bond Indices as the underlying, to be listed on SGX. They will also explore disseminating the Bond Indices via each party's market data distribution network, and consider using the Bond Indices as a component in other indices published by the three parties.

The Bond Indices launch and MOU signing event was graced by Dr Gu Shu, Vice Chairman, Executive Director, President of ICBC, Mr Shui Ruqing, Chairman of CDCC, Mr Benny Chey, Assistant Managing Director (Development and International) from the Monetary Authority of Singapore, Mr Loh Boon Chye, CEO of SGX, together with nearly 200 guests from various financial institutions in Singapore.

Dr Gu Shu, Vice Chairman, Executive Director, President of ICBC, said, "The international usage of RMB and the opening-up of Chinese financial markets are complementary. The Chinese bond market has emerged to be the world's second-largest. Foreign investors are increasing their RMB bonds holdings. CCDC and ICBC are leveraging our respective brand advantage and market influence to jointly launch the ChinaBond-ICBC RMB Bond Index. The indices will serve as an authoritative performance tracking benchmark for market participants. Meanwhile, supporting services will be provided to help foreign investors grasp new opportunities in the Chinese market. ICBC is keen to work closely together with relevant financial institutions and enterprises to share the fruits of RMB internationalization, and to make greater contributions to promote the economic development and the well-being of people in China, Singapore and ASEAN."

Mr Shui Ruqing, Chairman of CCDC, pointed out, "As a major financial market infrastructure, CCDC is an important gateway for the opening-up of China's financial market. The ChinaBond Pricing Data published by CCDC is the most widely recognised pricing benchmark in the RMB bond market. The listing of the ChinaBond-ICBC RMB Bond Index on SGX, a platform with a strong international outreach, will better exhibit the Chinese bond market to overseas investors by providing a more efficient and transparent investment tool."

Mr Loh Boon Chye, CEO of SGX, remarked, "We are pleased to partner ICBC and CCDC to facilitate international investors' access to and promote interest in China's growing bond market. China has the world's second largest bond market, of which about 90% of bond issuance and trading activities come from the interbank market, with about RMB2 trillion worth of bonds held by non-domestic investors1. As Asia's most international multi-asset exchange located in a key offshore RMB centre, SGX is well-positioned to be the strategic partner of Chinese financial institutions and enterprises as China opens up its financial markets and the internationalise the RMB."

ICBC is the largest institutional investor, the largest bond underwriter, a leading market-maker, and the top settlement agent for foreign institutions in China's interbank bond market with over RMB6 trillion of bonds. It is also the sole RMB clearing bank in Singapore which provides 24-hour continuous clearing services. As at the end of October 2019, the total settlement volume has surpassed RMB275 trillion.

CCDC is a major financial market infrastructure in China. At the end of October 2019, the accumulated bond settlement volume of CCDC has surpassed RMB1100 trillion, and the bond under the depository of CCDC has surpassed RMB63 trillion, accounting for 75% of the China interbank bond market. The ChinaBond Pricing Data published by CCDC promotes the formation of the fair value of bonds and improves market transparency.

The ChinaBond-ICBC RMB Bond Index aims to expand China's financial industry to offshore markets, attract international capital investments, promote capital financing using RMB as well as encourage the usage of RMB in Singapore to meet the diversified needs of international investors. This year marks the 10th anniversary of China's move to gradually internationalize the RMB.

1 As at end September 2019

Attachments