Green bond issuance up as market interest grows

Hong Kong Exchanges and Clearing (0338) yesterday said the issuance volume of green bonds for the nine months ended September was higher than the whole of last year.

Grace Hui, managing director of markets division and head of green and sustainable finance, said at the Belt and Road Summit that the epidemic has changed the market's perception of health and environmental investment, and increased market interest in related exchange traded funds.

HKEX earlier said it plans to launch the HKEX Sustainable and Green Exchange 'Stage' which will act as a central hub for data and information on sustainable and green finance investments in the region.

The exchange could also act as the bridge between mainland China and international markets, it said.

Meanwhile, the Hong Kong Monetary Authority chief executive Eddie Yue Wai-man said the authority hopes to launch stock and bond-related derivatives, based on Stock Connect.

And Diana Cesar, chief executive of the Hongkong & Shanghai Banking Corporation, expects the next stage of the Belt and Road Initiative will focus on clean and green development, attracting more international corporations to join the projects.

In other news, China has overtaken the US as the top foreign market for companies across Asia-Pacific, according to a new survey that underscored several ways the pandemic is accelerating shifts in the global economy.

Bloomberg meanwhile reported that some of China's smaller banks are finding it increasingly difficult to borrow from each other, another sign that rising corporate defaults are starting to infect the financial system.

The cost of one-year interbank debt -- a lifeline for small and medium lenders -- was at 3.34 percent on Monday, or about twice what it was in April. The yield is now 39 basis points higher than the rate offered by the People's Bank of China on its medium-term loans, the widest gap since July 2018.