The Luxembourg Stock Exchange has recently signed a string of agreements with major stock exchanges and institutions in China, strengthening its appeal as the world’s leading green bond trading hub. The initiatives were signed in the presence of the Prime Minister of China, Li Keqiang, and the Prime Minister of Luxembourg, Xavier Bettel, during the Boao Forum for Asia, which recently concluded in Hainan, China.
An information exchange agreement signed with the Shanghai Clearing House connects the Luxembourg Stock Exchange (LuxSE) to the China Interbank Market (CIBM). This enables investors to easily call up current price data on green bonds traded in Shanghai and Shenzhen, as well as in the CIBM. The additional information makes it easier for international investors to compare prices and should boost trading volumes as this supports more bond issuance.
LuxSE also signed an MoU with the Bank of China, which will see the Bank act as intermediary between the European and Chinese markets, providing international investors with simplified access to securities listed in China.
In addition, LuxSE has launched a Green Bond Channel with the Shenzhen Stock Exchange, in a complementary move to its existing arrangement with the Shanghai Stock Exchange. This channel offers core information in English about green bonds currently traded in Shanghai and Shenzhen. The Green Bond Channel also covers the asset backed securities segment, which is particularly relevant in China, as well as more traditional bonds.
Nicolas Mackel, CEO of Luxembourg for Finance, the development agency for the country’s financial sector, commented: “These agreements further cement our financial centre’s attractiveness as a truly global and collaborative marketplace. They encourage simplicity and transparency in the green bond market, and they help to underpin the broader emphasis we are putting on developing the country’s sustainable finance credentials.”