Tradeweb Markets, a global operator of electronic marketplaces for rates, credit, equities and money markets, says it will expand its trading link with mainland China to allow onshore institutions access Hong Kong’s bond markets.
This gives Tradeweb the ability to service “southbound” flows, complementing its existing setup for supporting “northbound” flows from Hong Kong into mainland China’s bond markets.
The southbound channel opens on September 24 in partnership with China Foreign Exchange Trade System (CFETS), the same organization that Tradeweb works with for northbound flows.
Tradeweb was the first platform to enable offshore investors to buy and sell Chinese onshore bonds via its fully electronic request-for-quote (RFQ) trading link to northbound Bond Connect. More than $900 billion in CNY cash bonds trades has been done via Tradeweb since the launch of Bond Connect in July 2017.
Last year, Tradeweb once again partnered with the China Foreign Exchange Trade System (CFETS) to deliver the first fully electronic RFQ access to China Interbank Bond Market (CIBM) Direct, another popular route for overseas investors connecting to and trading in the Chinese onshore bond market.
Lee Olesky, CEO of Tradeweb Markets, said, “After being selected as the first platform to link to Bond Connect and China’s $15 trillion onshore bond market, we are honored to be chosen again as a launch partner for Southbound trading.”
Yi Zhang, President of CFETS, said, “The success of Northbound trading is proof that electronic execution is the way forward for bond market participants, and we are excited to see how it can further enhance onshore investors’ Southbound trading experience.”
Through the new Southbound Bond Connect solution between CFETS and Tradeweb, onshore institutional investors can conduct price discovery, trade negotiation and trade execution with Tradeweb’s network of regional and international liquidity providers in the offshore bond markets, via fully-electronic RFQ. The expansion of Bond Connect provides onshore institutions with more ways to diversify their fixed income investment portfolios.
The southbound launch is the result of years of planning, says James Sun, Tradeweb’s head of Asia. “Our teams in Shanghai and Hong Kong continue to work closely with investors and liquidity providers to ensure the success of the new trading channel,” he said.
