Hong Kong welcomes establishment of Asian Bond Fund

The government and the Hong Kong Monetary Authority today (June 2) welcomed the launch of the Asian Bond Fund (ABF) by the EMEAP Group (the Executives' Meeting of East Asia-Pacific Central Banks).

The ABF will have an initial size of about US$1 billion, and will be invested in a basket of US dollar denominated bonds issued by major Asian economies.

All 11 members of the EMEAP Group, which includes the HKMA, will invest in the Fund at its launch.

"The ABF represents a joint effort of regional central banks to promote the
development of bond markets in the region, which will help promote the channelling of official reserves of Asian economies back to the region," the Financial Secretary, Mr Antony Leung, said.

"I am pleased that the Exchange Fund will join the other EMEAP central banks in investing in the Fund, which should contribute to diversification and yield enhancement for the Exchange Fund's bond portfolios," he said.

The Chief Executive of the HKMA, Mr Joseph Yam, said the Asian Bond Fund was a concrete example of co-operation among EMEAP central banks to develop the Asian bond market.

"I would like to thank the EMEAP Working Group on Financial Markets for its innovation and hard work in bringing the ABF concept into fruition. The HKMA is honoured to have played an active role in this process and will continue to support and contribute to future efforts in developing the regional bond market," he said.

Mr Yam said the Working Group would now study the possibility of extending the ABF concept to include bonds denominated in regional currencies.

The Executives' Meeting of East Asia-Pacific Central Banks is a co-operative organisation comprising central banks and monetary authorities of 11 economies: Australia, China, Hong Kong SAR, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore and Thailand.

End/Monday, June 2, 2003