Bonds in Macao: the impetus of modern finance

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To address challenges of its unbalanced industrial structure, Macao has highlighted the importance of economic diversification, and prioritised modern finance, especially the bond market, as a cornerstone of its strategic transformation. Recent years have witnessed the birth, expansion and maturation of Macao’s bond market, and its progress from isolated breakthroughs to systemic advancement. With fruitful results, the construction of the bond market has enriched Macao’s financial ecosystem, and laid a solid foundation for economic diversification in the future.

Strategic expansion: high-speed growth
In 2020, the Macao SAR government first introduced the concept of ‘modern finance’ in its policy address. Later, in 2022, the ‘one plus four’ appropriate economic diversification strategy was formalised (‘one’ refers to the diversified development of the integrated tourism and leisure industry, and ‘four’ refers to four major industries: health, modern financial services, high technology and finally the convention, exhibition, trade, culture and sports industry.

Today, the financial sector has grown to become the second-largest industry in Macao, with an ecosystem led by banking and insurance, together with bonds, funds and other financial business.

The development of Macao’s bond market dates back to 2018, and in 2021 the Central Securities Depository (CSD) system was implemented. In recent years, the Macao SAR government has undertaken efforts to enhance bond issuance mechanisms, financial infrastructure, supporting laws and regulations, and the collaboration with Chinese Mainland, Hong Kong and other regions.

Nowadays, notable issuers include the Ministry of Finance of China, People’s Government of Guangdong Province, and mainstream financial institutions and enterprises. Bonds in Macao are issued in different currencies, namely in Chinese Yuan, US dollars, Hong Kong dollars and Macau Patacas. By 2024, the total value of publicly offered and listed bonds in Macao reached $100bn.

The construction of the bond market has enriched Macao’s financial ecosystem

As a mainstream local commercial bank and the Chair Institution of the Securities and Funds Industry Association of Macao, ICBC (Macau) plays a pivotal role in the development of Macao’s bond market. The bank serves in multiple capacities including issuer, institutional investor, underwriter, clearing bank, agency bank and trustee administrator, providing comprehensive services that span the entire bond market value chain.

For the past few years, the bank has witnessed important moments of Macao’s bond market, and spearheaded significant transactions. It has executed over $1bn of bond issuance across four consecutive years, making it the…