Bank of China Hong Kong and FTSE Group are joining forces to develop a new “FTSE-BOCHK Offshore RMB Bond Index Series”.

This partnership brings together BOCHK’s position in the offshore RMB business as well as FTSE’s indexing expertise and global network, to provide the market with an industry standard benchmark, the organisations said in a statement yesterday. The new indices will help global investors to better capture the opportunities in the offshore RMB fixed income as an investable asset class, they said.

Under the partnership, BOCHK Asset Management is the advisor of this new “FTSE-BOCHK Offshore RMB Bond Index Series”. FTSE will offer calculation and management services with respect to the existing Offshore RMB Bond Indices provided by BOCHK.

“This will provide a solid foundation for the development and issuance of the new indices. FTSE will conduct the licensing procedures of the new ndices globally upon completion of the transition details,” the bank said.

BOCHK and FTSE hosted a partnership launch ceremony at the Bank of China Tower last week. Guests included Mark Makepeace, chief executive, FTSE Group; He Guangbei, vice chairman and chief executive, BOCHK; Julia Leung, under secretary for Financial Services and the Treasury, HKSAR Government; Carlson Tong, chairman, Securities and Futures Commission; Peter Pang, deputy chief executive, Hong Kong Monetary Authority; David Wong, Deputy chief executive, BOCHK; and  Dr Au King Lun, CEO, BOCHK AM.

"There is increasing demand for access to RMB fixed income products and FTSE’s global brand, combined with BOCHK’s track record in RMB indices, will enable us to accelerate the development of a global investor offering in this area,” said Makepeace.

“FTSE has been proactively expanding its global fixed income operations, most recently through a new joint venture with TMX Datalinx. The fixed income market represents a significant growth opportunity for FTSE and we will continue to work with our partners to provide innovative index solutions to global investors,” he continued.

David Wong of BOCHK said: “Given the increasing significance of RMB in the world economy, we see growing demand for RMB fixed income products. In this regard, the introduction of the new indices will offer those investors with an array of quality benchmarks. It will also help facilitate the development of offshore RMB bond markets worldwide.”

Au King Lun, chief executive of BOCHK AM, said: "By providing our source of offshore RMB fixed income data, we believe that the New Indices will help global investors better gauge the performance of the offshore RMB bonds and benefit from the rapid growth of this market.”

As a "pioneer in RMB business", BOCHK said it enjoys distinctive advantages in RMB services with its product innovation, extensive service network, efficient settlement channel and professional teams. “Capitalising on its strong franchise, BOCHK is well positioned to offer comprehensive and competitive RMB solutions to meet the global needs of customers,” the statement said.

FTSE has been proactively expanding its fixed income solutions for investors and recently announced the launch of FTSE TMX Debt Capital Markets, a new joint venture with TMX Datalinx, which has created the third largest exchange traded fixed income fund index provider globally. Together these indices are used as benchmarks for more than C$1 trillion in fixed income assets, according to the statement.