Amid growing efforts to bolster Macau’s financial sector, is Hengqin emerging as a pivotal player in this journey?
Macau Business | April2024 | Special Report | Modern Finance
Next month marks a year since a historic event unfolded in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin: the issuance of the first corporate bond on May 15th by Zhuhai-based Huafa Investment Holdings Group. This milestone occurred during a cooperation zone bond support policy exchange meeting held in the sophisticated Hengqin International Finance Center.
The significance of this achievement, while largely symbolic for now, underscores efforts to actively cultivate a local bond market as part of Macau’s strategy to reduce its economic reliance on gaming. Notably, the Macau Government has integrated Hengqin into this strategic endeavour.
However, until May 2023, tangible progress supporting this ambition had yet to materialize. A month earlier, Huafa Investment Holdings Group had also made history by issuing bonds in the Hengqin Cooperation Zone through the Chongwa (Macao) Financial Asset Exchange Co., Ltd. These bonds were simultaneously listed overseas on the Luxembourg Stock Exchange, marking the first “non-financial corporate bond” denominated in Chinese currency to be listed on Macau’s bond market.
According to Hengqin authorities, this initiative represents an effective means for enterprises in the Cooperation Zone to issue bonds in Macau and establish connections with the capital markets of Portuguese-speaking countries via Macau’s capital market.
The broader question remains: What role can Hengqin play in facilitating Macau’s transition to modern finance, and to what extent might this engender competition? The answer may lie in the comprehensive development plan for the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, approved by the State Council in December.
With the goal of promoting integrated development between Hengqin and Macau, the plan aims to innovate and optimize policies, fostering deeper cooperation between Guangdong and Macau through more robust liberalisation measures.
In response, Hengqin authorities have formulated supportive policies for enterprises issuing bonds in Macau, including a one-time subsidy equivalent to 2% of the funds raised, capped at RMB5 million.
Yet, a fundamental question remains: Could Hengqin serve as the foundation for a future securities market? Experts suggest that the release of an industrial classification by the Hengqin In-depth Cooperation Zone could accelerate the development of Macau’s securities market, attracting more investors and furthering the zone’s financial ambitions.
As plans for an RMB-denominated Stock Exchange in Macau take shape, the role of Hengqin in this evolving financial landscape becomes increasingly significant.
Cooperation in the GBA
With the aim of fully implementing the Outline Development Plan for the Guangdong-Hong Kong-Macau Greater Bay Area (GBA),” the People’s Bank of China (PBoC), the Hong Kong Monetary Authority (HKMA), and the Monetary Authority of Macau (AMCM) signed the “Memorandum of Understanding (MoU) on Deepening Fintech Innovation Supervisory Cooperation” in the GBA a few months ago.
Under this MoU, the three authorities have agreed to link up the PBoC’s Fintech Innovation Regulatory Facility, the HKMA’s Fintech Supervisory Sandbox, and the AMCM’s Regulatory Requirements for Innovative Fintech Trials into a network.
In compliance with laws and regulations, this “network link-up” will continue to deepen fintech innovation cooperation, promote the development of digital finance in Guangdong, Hong Kong, and Macau, enhance the quality and efficiency of financial services in the GBA, and strengthen financial support for the development of the GBA.
As a next step, the three authorities will deepen the synergy of fintech supervisory cooperation to facilitate the high-quality financial development of the GBA.
