02 Jul

The Theme for the Fixed Income Leaders Summit HK - China, China, China

This was the first Fixed Income Leaders Summit to be held in Hong Kong, so unsurprisingly the event was smaller than Boston and Amsterdam - but it still attracted 250 attendees

Steve's notes below -

- Just like Boston’s event, many discussions centred on Regulation, Market Development, and Technology

- Unlike Boston (where Data was the #1 topic), in Hong Kong it was China, China, China

- Although accessing China’s debt markets was one of the key drivers for people to attend, there are still some significant issues to work through, like tax and settlement, before deciding on the correct technology for Foreign Investors

- There was a lot of talk about platforms and technology, but this seems a little premature given the current market. Electronification will certainly become mainstream over time, and fragmentation will increase, but China still has a way to go

- The buy-side in Asia is behind Europe and the US in terms of embracing e-trading technology. Having seen the same in the adoption of e-FX, this is no real surprise

- Many of the panels and conversations referenced Bond Connect as an example of accessing the Chinese market. Whist the system is successfully up and running, it is still early days as far as full automation is concerned. Most trades ‘onshore’ are via phone or chat, and from my conversations it seems that many Bond Connect Northbound deals are being priced this way and then booked post trade using TradeWeb terminals.

- Volume will pick up significantly from US$600m/day currently due to the addition of RMB denominated securities to the Bloomberg Barclays Global Aggregate Index from April 2019. The percentage of fully negotiated RFQ workflows will no doubt increase also