The China Development Bank says the subscription result of the first issue of renminbi bonds in Hong Kong is encouraging, with an oversubscription rate of nearly two times.

Monetary Authority Chief Executive Joseph Yam is pleased with the result, saying it highlights the strong demand of investors in Hong Kong for renminbi-denominated investment instruments. 

"The success of the first issue of renminbi bonds forms a good basis for the further development of the renminbi bond market in Hong Kong. It has also opened up a new channel for financial intermediation between Hong Kong and the Mainland."

System upgraded

To facilitate the issuance and trading of renminbi bonds in Hong Kong, the Real Time Gross Settlement system and Central Moneymarkets Unit have been upgraded to handle the related settlements of renminbi funds and trading of renminbi bonds.

The newly introduced renminbi interbank transfer service and use of renminbi cheques in Hong Kong have operated smoothly during the subscription process, signifying the enhancement of capabilities of local banks in handling renminbi financial transactions.

The authority also welcomes the work being undertaken by the Treasury Market Association on the arrangements for renminbi bond price fixing and repo documentation, which will be conducive to the development of a secondary market for renminbi bonds in Hong Kong.