This unique and innovative solution provides clients with the opportunity to use onshore CGB to fund their margin call and derive additional value from their onshore holdings, which will increase the acceptance of Chinese debt as collateral outside of China to further advance the internationalisation of the RMB. It also capitalises on the latest milestones in the opening up of China’s onshore bond market to attract more foreign inflows, including the inclusion of CGBs in the Bloomberg-Barclays Global Aggregate bond index and the JPMorgan Government Bond-Emerging Market index.
Commenting on the offering, Edmund Ng, CIO and Co-Founder of Eastfort Asset Management, said: “We are delighted to be the first to use CGB as a pledge for other transactions with Standard Chartered, who is our key partner and the most advanced counterparty in the China bond market. This should further facilitate China bonds to become a more mainstream asset class in the global asset allocation framework.”
Luke Brereton, Co-Head of Prime Services, Standard Chartered, said: “We understand that the cost of funding margin can translate into a drag on performance for our clients. As our clients’ trusted prime broker, we are committed to help them maximise funding efficiencies across their portfolio by offering access to innovative solutions. The collaboration with our Securities Services team to include assets held via Bond Connect in our prime custody offering truly demonstrates how we add value to our clients.”
Margaret Harwood-Jones, Global Head of Securities Services, Transaction Banking, Standard Chartered, said: “With access to 80 markets globally and on the ground expertise across Asia, Africa and the Middle East, we are well-placed to support our institutional clients’ investment needs as their leading custodian bank. This integrated solution further strengthens our position as the Bond Connect provider of choice to help our clients to capture greater capital efficiencies.”