SGX ties up with Bank of China and CFETS to globally promote bond indices

SGX will be the first exchange to distribute bond indices outside China.

Singapore Exchange (SGX) signed a strategic cooperation agreement with the Bank of China (BOC) and China Foreign Exchange Trade System & National Interbank Funding Centre (CFETS) to jointly promote the CFETS-BOC Traded Bond Index to international investors, an announcement revealed.

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Under the agreement, the three parties will explore disseminating the bond indices via SGX’s market data distribution network, as well as developing tradable products based on the indices. 

“The CFETS-BOC Bond Indices better reflect the market trends and flows of a comprehensive range of China onshore bond products,” BOC general manager and head of global markets Zhen Mei said in a statement. “We hope that international investors will utilise the indices and their related products to participate in investment opportunities and benefit from the opening up of the China bond market.”

Jointly developed by CFETS and BOC, the bond indices are based on the transaction characteristics of various types of bonds and represent top liquidity in the current China Interbank Bond Market (CIBM). SGX will be the first exchange to distribute the bond indices outside of China.

“These indices serve to provide an effective price-level indicator of the CIBM for domestic and foreign investors who wish to follow CIBM movements for performance benchmarking and portfolio construction and management,” SGX said.

“This strategic cooperation marks a further strengthening of financial ties between Singapore and China,” SGX CEO Loh Boon Chye said. “The distribution of the indices through SGX’s network will also familiarise international investors with Chinese domestic markets.”