互联互通机制专题研究：债券“南向通”扩容，机构全球化配置水平有望提升

Investment Rating - The report gives a "Positive" outlook on the interconnectivity mechanism of the bond market, particularly focusing on the "Southbound Bond Connect" [3][5]. Core Insights - The "Southbound Bond Connect" aims to provide a convenient, efficient, and secure channel for mainland institutional investors to invest in overseas bonds through the Hong Kong bond market, enhancing the openness of China's bond market [5][9]. - As of the end of February 2025, there are 962 bonds under the "Southbound Bond Connect" with a total balance of 546.06 billion RMB, indicating significant growth in both the number of bonds and the total amount [5][9]. - The establishment of the "Southbound Bond Connect" helps reduce investment costs and enriches the investment channels for domestic investors, with a net outflow limit of 500 billion RMB per year and a daily quota of 20 billion RMB [5][18]. Summary by Sections 1. Importance of "Southbound Bond Connect" for Mainland Institutions - The "Southbound Bond Connect" connects domestic and overseas investors, allowing for the trading of bonds across markets, thus enhancing the investment choices available to mainland investors [9][10]. 2. Enhancement of Cross-Border Investment Levels - The mechanism allows qualified domestic investors, including 41 major banking institutions and qualified domestic institutional investors (QDII and RQDII), to engage in bond investments [10][18]. 3. Potential for Expansion Driven by Institutional Demand - The Hong Kong bond market includes HKD bonds, offshore RMB bonds, and G3 currency bonds, with market sizes of 190.4 billion, 132.1 billion, and 627.2 billion USD respectively by the end of 2023 [20][24]. - The report highlights that the yield levels in the Hong Kong bond market are generally higher than those in the domestic market, providing better investment value [24][30].