The respective monetary authorities of Macao and Hong Kong will establish a direct link between their clearing, settlement, and custodian systems to promote the development of bond markets and deepen financial cooperation within the Greater Bay Area.
The Monetary Authority of Macao (AMCM) and the Hong Kong Monetary Authority have jointly announced that the central securities depository operated by Macao Central Securities Depository and Clearing Limited – a wholly-owned subsidiary of the AMCM – will be linked to Hong Kong’s central moneymarkets unit. The agreement will allow investors from each SAR to clear, settle and hold bonds lodged in either system.
While a date for the link has yet to be announced, the move is being hailed as “a new milestone in the financial cooperation between Hong Kong and Macao” by the two authorities.
[See more: Guangdong to issue another round of ‘dim sum’ bonds in Macao]
Macao’s government has focussed on growing its bond market in recent years, with finance one of the four emerging industries considered key to the SAR’s economic diversification. AMCM chairman Benjamin Chan has described the market as “the crucial cornerstone” for diversifying the territory’s financial ecosystem.
He added the new agreement would also strengthen “Macao’s function as the financial services platform serving China and Portuguese‑speaking countries.”
According to Bloomberg data, Macao’s bond market is valued at US$22 billion, while Hong Kong’s market is almost 20 times bigger at US$421 billion.
