固定收益深度报告:债券“南向通”扩容下的投资机会


- Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report The regulatory authorities plan to optimize the Bond "Southbound Connect" mechanism and expand the investor access scope, providing institutional guarantees for domestic funds to allocate offshore bonds. The report systematically analyzes the development background, operation mechanism, and investment opportunities under the expansion of the Bond "Southbound Connect" to clarify the infrastructure for cross - border bond allocation for investors [1][8]. 3. Summary According to the Directory 3.1 Bond "Southbound Connect" Launch Background and Regulatory Policy Development Process - The Bond "Southbound Connect" aims to build an efficient offshore bond allocation channel for domestic institutional investors by deepening the cooperation between the bond market infrastructure institutions of the two regions. Before its launch, domestic institutions' participation in the overseas bond market was restricted by complex approval processes, limited investment quotas, and high transaction costs [2][9]. - The policy history can be divided into three phases: 2017 - 2020 was the policy foundation period with the priority launch of the Bond "Northbound Connect"; in 2021, the "Southbound Connect" mechanism was officially implemented; since October 2024, it has entered the expansion and deepening period, with plans to expand the investor scope to non - bank institutions such as securities firms, funds, insurance companies, and wealth management institutions, and optimize multi - currency settlement and repurchase mechanisms [2][10]. 3.2 Bond "Southbound Connect" Operation Mechanism 3.2.1 "Southbound Connect" Business Operation and Regulatory Mechanism - There are two custody modes for domestic investors: the multi - level direct connection custody mode relying on domestic bond registration and settlement institutions, and the global custody mode relying on domestic custody and clearing banks (also known as the "dual - custody" mode of domestic and overseas custodian banks). The global custody mode has a wider trading scope and more flexible currency support [17][19]. - The clearing mechanism varies according to the transaction currency. For RMB and Hong Kong dollar settlements, Delivery versus Payment (DVP) settlement is adopted, while for US dollar and euro settlements, Free of Payment (FOP) settlement is used. The settlement confirmation and processing have specific time requirements [20]. - The cross - border capital flow under the "Southbound Connect" is strictly regulated. The People's Bank of China is responsible for overall supervision, and the China Foreign Exchange Trade System (CFETS) monitors the transaction quota in real - time. Domestic investors can exchange RMB for foreign currencies through the inter - bank foreign exchange market and hedge exchange rate risks, and the funds are earmarked for bond investment [21][22]. - The "Southbound Connect" adopts a cross - border capital net outflow quota management mechanism, with an annual net outflow quota of 50 billion yuan equivalent and a daily quota of 20 billion yuan equivalent for all participating institutions. The actual investment scope needs to consider multiple factors [3][23]. 3.2.2 "Southbound Connect" Market Makers and Domestic Investor Scope - The current trading counterparties of the "Southbound Connect" are 22 market makers designated by the Hong Kong Monetary Authority, which provide liquidity support and trading services for the market [27]. - The current domestic investors mainly include two types: 41 bank institutions among the primary dealers of open - market operations, and institutional investors with Qualified Domestic Institutional Investor (QDII) and Renminbi Qualified Domestic Institutional Investor (RQDII) qualifications. In the future, the investor scope is expected to expand to non - bank institutions, which may change the investment preference in the overseas bond market [28]. 3.2.3 "Southbound Connect" Transaction Process - The participation in "Southbound Connect" transactions involves qualification approval, account opening, and transaction execution. The main trading mode is the Request for Quote (RFQ) mode, which is completed through the CFETS system and overseas platforms [32]. - For qualification approval and account opening, eligible domestic investment institutions need to submit application materials to the National Inter - bank Funding Center and complete the account configuration process. For transactions, investors send quote requests, market makers provide feedback, and the transaction is confirmed to be concluded [33][35]. 3.3 Investment Opportunities under the Expansion of the Bond "Southbound Connect" 3.3.1 Overall Situation of the Hong Kong Bond Market - The investable bond scope of the Bond "Southbound Connect" includes all bonds issued overseas and traded in the Hong Kong bond market, including offshore RMB bonds (dim - sum bonds), Hong Kong dollar bonds, and G3 currency (US dollar, euro, yen) bonds. In practice, offshore RMB bonds and Chinese - funded US dollar bonds are the main investment targets [4][22]. - As of the end of 2024, the outstanding balances of Hong Kong offshore RMB bonds, Hong Kong dollar bonds, and G3 currency bonds were 173.2 billion US dollars, 195.5 billion US dollars, and 565.6 billion US dollars respectively. The composition of each currency bond is different: Hong Kong dollar debt instruments include sovereign and corporate bonds; offshore RMB debt instruments are all dim - sum bonds; most of the G3 currency bonds issued in Hong Kong are Chinese - funded US dollar bonds [40][42]. 3.3.2 Key Sector of the "Southbound Connect": Dim - sum Bonds - As of August 3, 2025, there were 3,970 outstanding dim - sum bonds with a total scale of 277.252 billion US dollars. After excluding certificates of deposit, there were 2,936 outstanding bonds with a scale of 215 billion US dollars. The dim - sum bond market has shown a significant expansion trend since 2023, and the low - cost capital environment in the Hong Kong market is conducive to its issuance [43]. - Most of the remaining maturities of outstanding dim - sum bonds are less than 3 years, accounting for 73% of the total scale. In terms of industrial distribution, financial and government bonds have a large stock scale. Energy and industrial sectors have relatively high coupon rates [43][46]. - In the secondary market, the excess spread space of offshore RMB sovereign bonds is currently insufficient, while 1 - 3 - year financial dim - sum bonds, industrial dim - sum bonds within 3 years, and urban investment dim - sum bonds within 5 years have relatively high yields [49]. 3.3.3 Key Sector of the "Southbound Connect": Chinese - funded US dollar Bonds - As of August 1, 2025, there were 2,148 outstanding Chinese - funded US dollar bonds with a total scale of 647.6 billion US dollars. The issuance pace slowed down in 2023 but showed a recovery trend in 2024. From January to July 2025, the total issuance scale was 75.2 billion US dollars, a year - on - year increase of 22.5 billion US dollars [55]. - Most of the remaining maturities of outstanding Chinese - funded US dollar bonds are less than 3 years, accounting for 65% of the total scale. In terms of credit quality, investment - grade and high - yield bonds account for 31% and 1% respectively, and the rest are unrated bonds [58]. - In terms of industrial distribution, the financial, real estate, and communication sectors have a large stock scale. The industrial and urban investment sectors have relatively high coupon rates. The secondary market yields of Chinese - funded US dollar bonds are significantly higher than those of domestic bonds, and among investment - grade Chinese - funded US dollar bonds, the yields of urban investment US dollar bonds within 3 years are slightly higher than those of industrial and financial bonds [60][63].