The world's second largest index service provider, the FTSE Russel, has been discussing with Chinese authorities to include Chinese bond into its FTSE indices, as reported by the China Securities Journal on Monday.
China's launching of a new science and technology innovation board, which was announced by Chinese President Xi Jinping at the first China International Import Expo (CIIE) earlier this month, will prompt the FTSE Russel to consider a weight increase of China's A-shares in the FTSE indices, the company said on the same day.
Besides, stocks, which have suspended their trading beyond a certain standard, will be removed from the indices to discourage such behaviors.
The FTSE Russel has unveiled its research on China's bond market in October. It said the Chinese government bonds are becoming appealing as trade tensions are causing capital flight to safer assets, and China's policymakers are supporting more liquidity in the country's financial systems.
In the meantime, China's implementation of real-time delivery-versus-payment (DVP) settlements for the bond market has removed a significant barrier for offshore investments, the report said, this move would increase foreign appetite for China's debt market.
"The DPV settlement scheme could boost Bond Connect following a slow start," the report said, as "Bond Connect fostered a sense of optimism among international investors when it was launched in July 2017."
In areas of green bond issuance, China may seek to maintain a leading position.
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