A very warm ‘virtual’ good morning to you all. I’d like to thank the organizers for the opportunity to join you for this impressive and important Bund Summit.
Like all of us, I have been reflecting on what an extraordinary year it has been, as we all continue to work through these challenging and uncertain times.
The Bund Summit has garnered participation from such a global array of leaders distinguished in their fields. This goes to show that there has never been a stronger need, nor a more concerted willingness, to come together as a global financial community to tackle some of the complex challenges before us.
I think that also speaks to the fact that while our attention must rightly be on solving for the impact of a pandemic, there is a shared mindset among leaders in government, business and society to continue to push forward for inclusive progress -- in shaping world markets and a resilient global financial system.
In fact, some of the transformation that has come from that resolve has actually been positive.
The financial sector for one, has been transformed by the impact and fallout of the current situation.
Bloomberg sees first-hand every day how the need for reliable, scalable, automated data and technology systems and capabilities has been accelerated.
There is no doubt that the finance industry is experiencing seismic changes across a wide spectrum as a result.
With much of the financial sector having to drive their operations in new and virtual ways, banks and investment firms face profound operational stress.
They have had to rapidly pivot their customer engagement strategies to a virtual interface and make that function effectively in a very short space of time. We now live in a world where delivering virtual financial services is the norm.
No-one could have predicted 12 months ago that this is where we’d be.
In Asia, that has manifested in financial institutions adopting mobile and remote technologies to run their businesses, and using automated data and transaction techniques to transact.
Changes have been particularly acute in corporate banking and capital markets, which have traditionally relied on in-person interactions and physical infrastructure.
With the need to stay connected to secure trading and compliance systems while working from home, new ways of working have emerged all across the world that will likely be a permanent shift in many respects.
Firms must now embrace new technology that has to remain resilient, secure and scalable, in a far more complex and remote environment.
Governments and regulators have to now monitor and steward these shifts to ensure compliance and integrity continues in new systems.
Amid all of this change and market volatility, data and technology have become more vital than ever in making sense of these market dislocations and successfully navigating through them.
Highlighting this, we have seen market data ticks spike from 100+ billion to 250+ billion per day over recent months.
This indicates to us that data is clearly being used by institutions to gain more control over and insight into managing risks and making informed investment decisions.
All of this illustrates that the future of finance may be here sooner than most market participants could ever predict, and become more mobile, agile, data-driven and customer-centric.
We’ve seen companies moving quickly to find out-of-the-box ideas to adapt and capitalize on a new set of investment opportunities. They have demonstrated that innovation in times of crisis that comes through purpose, not by accident, can help firms gain an edge and thrive.
Amidst this global upheaval, a clear bright spot has been what I would term a “coming of age for China’s bond markets”.
Over a relatively short number of years, China’s bond markets have moved from early beginnings through infancy and now into a progressive maturing.
Setting new highs in transaction levels by foreign investors of RMB-denominated bonds, the China bond market is an increasingly important and vibrant part of global markets.
In our view, the coming of age of China's bond market is being driven by three key factors.
Firstly, long-term institutional capital and private wealth are increasingly seeking diversification and superior alpha in what is otherwise a persistently low interest rate environment.
Secondly, we see new strategic partnerships emerging that will serve to continue the internationalization of China’s financial markets, and that is moving at pace.
As a recent example of that growing international vibrancy, just last month Bloomberg, together with CFETS, announced the launch of the Request-for-Quote service for CIBM-Direct on our Bloomberg Terminal.
This new electronic trading service will bring greater efficiency and market transparency to facilitate global investor trading of Chinese bonds with onshore market makers. It also reinforces the status of the Bloomberg Terminal as one of the major offshore access points to China’s bond market.
Thirdly, shaping of a transparent regulatory environment coupled with the ongoing internationalization of the RMB are positive trends that make China an investible bond market. It is encouraging to see regulators in China working to facilitate wider market development and improved access for example across derivatives, ESG and fintech.
The growth and depth in the bond market goes hand-in-hand with the increasing experience of domestic market makers in serving international clients through higher quality research and stronger liquidity. In parallel, we’ve seen new levels of professionalism with the China sell-side.
And the explosion in capability and availability of electronic trading platforms, analytical tools and greater automation are also resulting in better efficiency, deeper liquidity and improved market infrastructure.
Bloomberg has been determined to play our part in the coming of age of China’s bond markets. We’re delivering robust electronic platforms for offshore investment, which broadens the investor and dealer network, and we offer a full suite of enterprise products and data for offshore investors interested in China.
As part of that evolution, in November, we will be furthering the internationalization push when we complete China's inclusion into the Bloomberg Barclays Global Aggregate Index.
Inclusion in the index will mark a major milestone in the investibility of the bond market. Upon completion, Chinese securities will represent about 6% of the index, and local currency Chinese bonds will be the fourth largest currency component after the US dollar, euro and Japanese yen.
Looking ahead, we expect to see the next stage of growth in China’s bond markets result in enhanced and healthy competition with international market makers on the global stage.
Whatever the future holds, we are encouraged that despite today's unpredictable global climate, China continues to open up its financial markets, presenting enduring opportunities for global investors and Chinese financial institutions.
25 years ago, we first set foot in China with a modest office in Shanghai. Today, Mainland China is the fastest growing market for us worldwide.
Over the years, we have seen first-hand the massive and rapid change in China domestically and in its expanding role in the international financial community. We are convinced that evolution will continue deliberately and constructively.
There is no doubt the world economy is facing unprecedented challenges and disruptions – all of us see and feel that every day. How we’re collectively dealing with those challenges is ultimately what truly matters.
The financial sector is responding by developing and adopting more reliable solutions to support business resilience, manage risks and drive long-term growth.
For our part, Bloomberg has been and will be an all-weather partner to our customers and stakeholders, providing best-in-class data, trustworthy information and news, as well as robust technology and systems so we play our part to help advance the markets.
I truly believe that in times of great challenge, there is also great opportunity for the bold to achieve real change and progress. The coming of age of China’s bond markets is a powerful example of what’s possible.
I wish you all a safe, healthy and prosperous path forward.
