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LuxSE channels data for “off-limits” China green bonds

Shanghai Stock ExchangeThe Luxembourg stock market is to provide access to Chinese green corporate bond data through a deal with the Shanghai Stock Exchange (SSE).

The Luxembourg Stock Exchange (LuxSE) and its Shanghai partner have struck a deal to launch the Green Bond Channel, which will provide information in English to international investors about Chinese green bonds.

The channel initially has information about 18 green bonds listed in Shanghai from 11 corporate issuers.

China has the world’s second largest bond market, valued at $9 trillion, with green and sustainable bonds valued at in excess of 250 billion renminbi (about €33 billion). Only 2% of bonds in the main market are foreign-owned, according to LuxSE.

The market may appear “off-limits” to the international investor community due to the difficulties of accessing the right level of information on the traded bonds, LuxSE said.

Robert Scharfe, chief executive of the exchange, said: “The Green Bond Channel is an information channel which aims to bridge this information gap. Our key focus is on helping to enhance investment channels between China and Europe. Stock exchanges can support the mobilisation of investor demand for investment.”

The exchange said the agreement will improve efficiency in connecting issuers and international investors and that Chinese-listed green bonds can be traded via existing execution channels.

In March 2018, LuxSE extended the same display service to the Chinese Interbank Market and welcomed the first bond from the Agriculture Development Bank of China.

LuxSE’s ambitions in green bond finance saw it launch the Luxembourg Green Exchange in 2016.

The Shanghai deal forms part of a broader plan in Luxembourg to become a world centre for green finance.

Luxembourg is not the only fund domicile with green ambitions. Guernsey, a rival to Luxembourg for alternative asset fund administration, also intends to develop the “broadest and best range of products” among international finance centres.

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