Budget Speech

Bond Market

76. Through the active promotion of the Government, Hong Kong's bond market has seen sustained growth, now ranking third in Asia (excluding Japan) in terms of total amount of bond issuances.   I will lead a steering group comprising members from the FSTB, the HKMA, the SFC, the IA and the Hong Kong Exchanges and Clearing Limited (HKEX), to formulate a roadmap for promoting the diversified development of Hong Kong's bond market and reinforcing its functions.

Consolidating Market Infrastructure

77. We will enhance the efficiency and capacity of our domestic Central Moneymarkets Unit (CMU) and introduce new functions to cope with the increasing market demand for Northbound Trading of Bond Connect and support its future commissioning of Southbound Trading, with a view to providing a risk-controlled channel for Mainland investors to participate in local and overseas bond markets.  We will develop the CMU as a major central securities depository platform in Asia and in the world in the long-run.

Bond Connect Development

78. We target to expand Bond Connect to cover both Southbound and Northbound Trading.  The implementation of Southbound Trading will further facilitate Mainland investors to make diversified asset allocation and present enormous opportunities for Hong Kong's financial industry.  The HKMA and the People's Bank of China have set up a working group to drive the initiative of Southbound Trading of Bond Connect, with the target of launching it within this year.

Retail Bond Market

79. Given that the global low interest rate environment will persist for a considerably long time, and many people in the community, especially the elderly, prefer investment options with steady and reliable returns, we plan to continue to issue no less than $24 billion of Silver Bond and no less than $15 billion of iBond this year.  We propose to raise the borrowing limit of the Government Bond Programme from $200 billion to $300 billion to allow sufficient room for bond issuances, so as to achieve the objective of promoting the sustainable development of Hong Kong's bond market.  The eligible age for subscribing Silver Bond will be lowered from 65 to 60.