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Financial and Monetary Affairs
its lead as the largest offshore RMB forex market. Its RMB RTGS system recorded RMB1,134 billion of transactions on average daily. According to the Bank for International Settlements Triennial Survey of Foreign Exchange and Derivatives Market Turnover, average daily turnover of RMB forex transactions in Hong Kong increased 39.6 per cent from US$77.1 billion in April 2016 to US$107.6 billion in April 2019.
Capital Raising Centre and Global Investment Platform for Mainland
Hong Kong is the ideal centre for Mainland enterprises to raise capital. The growing presence of Mainland companies listed on the SEHK has in turn increased the breadth and depth of Hong Kong's securities and futures markets through a greater diversity of products and constituent stocks in the equity market. Mainland enterprises also raise capital in Hong Kong through bond issuance, project financing and loan syndication. Moreover, they can leverage Hong Kong's position as an international business centre and its world-class investment banking services to invest in international markets via mergers and acquisitions.
Offshore RMB Business
Hong Kong is the leading and most important offshore RMB business hub. At the year end, the offshore RMB deposit pool, including customer deposits and outstanding certificates of deposit, amounted to RMB658 billion, while RMB bank lending and outstanding RMB bonds stood at RMB153.7 billion and RMB168.6 billion respectively. RMB trade settlement handled by banks in Hong Kong totalled RMB5.4 trillion in 2019.
Qualified institutions develop a wide range of products investing in Mainland onshore markets via platforms such as the Renminbi Qualified Foreign Institutional Investor scheme, Stock Connect, Bond Connect and China Interbank Bond Market. At the end of 2019, there were 33 fund management companies managing 42 SFC-authorised RMB-denominated unlisted funds investing primarily onshore via these channels with an aggregate NAV of RMB7.7 billion, and 25 SFC-authorised RMB-denominated ETFs investing primarily onshore via these channels with an aggregate NAV of RMB57.3 billion.
The Ministry of Finance has issued RMB sovereign bonds in Hong Kong for 11 consecutive years since 2009, including RMB15 billion of bonds issued in 2019. The People's Bank of China (PBOC) issued RMB bills for the first time in Hong Kong in 2018 and has since established a regular mechanism of central bank bill issuances in Hong Kong to enrich the city's spectrum of RMB financial products, thereby promoting RMB internationalisation. In 2019, RMB150 billion of bills were issued.
Stock Connect
Under the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, international investors can trade in over 580 shares and over 700 shares listed on the Shanghai and Shenzhen stock exchanges respectively. Mainland investors also get to choose from over 470 Hong Kong-listed stocks.
From 28 October, companies with a weighted voting rights structure as listed in Hong Kong under the new listing regime can be included as eligible securities under the southbound
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