HKEX launches offshore five-year China government bond futures

Each contract has a size of approximately $581,000 (RMB500,000).

Hong Kong Exchanges and Clearing (HKEX) has launched a five-year China Government Bond (CGB) Futures contract for offshore investors.

The futures product is based on CGBs issued on the mainland with a 3% annual coupon and annual interest payments.

Each contract has a size of approximately $581,000 (RMB500,000), with a minimum price fluctuation of 0.005% of the contract size, equivalent to $29 (RMB25).

They will be available for the two nearest quarterly months in March, June, September and December, and will be cash settled in renminbi. 

HKEX said the product is the only CGB futures contract available in the offshore market and complements existing cross-border programmes including Bond Connect and Swap Connect.

The pricing benchmark is supported by ChinaBond Pricing Center, which licenses bond valuation data and provides price calculation services for the contract.

At its launch, China Securities Regulatory Commission Chairman Wu Qing outlined measures to deepen links between the mainland and Hong Kong financial markets.

These include continued support for eligible mainland companies to list in the city and eligible Hong Kong-listed companies to list on the mainland.

$1 = RMB0.86