The Financial Services & the Treasury Bureau and the Development & Reform Commission of Guangdong Province jointly organised a seminar today to examine expanding the offshore renminbi (RMB) bond market and leveraging bond financing to support the development of the Greater Bay Area.

The seminar, held in a virtual format, provided a platform for participants to explore the future direction of the dim sum bond market in Hong Kong.

Speaking at the forum, Secretary for Financial Services & the Treasury Christopher Hui noted that the positive momentum of market development presents an opportunity for this event.

Mr Hui said: “At present, major global economies are entering a period of rising interest rates, therefore the cost of issuing RMB bonds is relatively low compared to other currencies such as the US dollar. It helps to drive more issuers to issue dim sum bonds in Hong Kong.”

According to market statistics, the issue amount of dim sum bonds in the first eight months of this year was the highest ever for the same period in previous years.

Mr Hui explained that the current interaction between the global, Mainland and Hong Kong interest rate markets has created a favourable market environment for the issuance of dim sum bonds.

The bureau and the Development & Reform Commission of Guangdong Province have taken the occasion to jointly organise this seminar with the hope of encouraging more Mainland enterprises and institutions to issue dim sum bonds in Hong Kong, he stressed.

Moreover, the treasury chief expressed that the goal of the seminar is to provide an opportunity for Mainland authorities, the Hong Kong Special Administrative Region Government and market participants to come together to explore the future direction of leveraging bond financing to support the development of the bay area.

Mr Hui also noted that the Shenzhen Municipal Government issued bonds totalling RMB5 billion in Hong Kong last year, which was the first time a Mainland municipal government issued bonds in Hong Kong.

He emphasised that the Hong Kong SAR Government has implemented supporting measures to exempt the payment of profits tax in respect of interest paid or profit received arising from the debt instruments issued in Hong Kong by the Shenzhen Municipal Government.

To facilitate more Mainland provinces and municipalities to issue bonds in Hong Kong with the authorisation of the central government, Hong Kong will consider extending the above tax concessions to cover the debt instruments issued in the city by other Mainland provincial and municipal governments in the future, Mr Hui added.

The seminar in Hong Kong was held at the Central Government Offices where keynote discussion sessions were conducted.

Participants in both places shared the enterprises' experiences of issuing dim sum bonds recently in Hong Kong and exchanged their views on the prospect of the internationalisation of the RMB and development of the bay area.