Insight & Analysis

Press release: Bank of America Merrill Lynch Shanghai branch named market maker for China Bond Connect

Published: Jul 2018

3rd July 2018 – Bank of America, N. A. Shanghai Branch (BANA Shanghai) announced today that it has been named a market maker for Bond Connect between mainland China and Hong Kong, and that it has completed its first client trade in China’s interbank bond market through the programme.

The first phase of Bond Connect was launched in July 2017. It allows overseas institutional investors to invest in China’s interbank bond market via Hong Kong. Phase two, which will allow investors from China to trade in major overseas over-the-counter bond markets, is expected at a later stage.

“Bond Connect is an important access channel for international investors to tap into China’s interbank bond market,” said Jin Su, co-head of Asia Pacific Fixed Income, Currencies and Commodities (FICC) at Bank of America Merrill Lynch (BofA Merrill). “China’s economy is more open and more globally connected than ever before. Demand is set to rise.”

BANA Shanghai is one of the most active market makers among foreign banks in China’s interbank bond market for onshore clients. Now, as a market maker in Bond Connect, BofA Merrill is able to provide overseas investors seamless access to China’s US$9trn interbank bond market.

“For the past two decades, the world focused on ‘Made in China’, but during the next decade, the focus will shift to ‘Trade in China’,” said Joydeep Sengupta, co-head of Asia Pacific FICC at BofA Merrill. “China has the world’s third-largest bond market, but overseas investors currently own less than three percent of it. Bond Connect has enormous potential as the international investor community rebalances towards China.”

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