Hong Kong is opening its arms to more sovereign debt issuers, as this week’s Apec Finance Ministerial Meeting (FMM) provides a good opportunity to demonstrate the depth and advantages of the city’s financial markets.
Its signature dim sum bond market could leverage low fundraising costs relative to that of developed markets and risk diversification considerations to make the city a magnet for sovereign borrowers, including many members of the Asia-Pacific organisation, according to analysts.
“Elevated US interest rates have increased the cost of dollar borrowing, making issuance in alternative currencies – including offshore renminbi – more attractive for many issuers, such as sovereign governments,” said Marcus Yin, assistant vice-president of the sovereign risk group at Moody’s, a credit rating agency.