The International Institute of Green Finance (IIGF), part of the Central University of Finance and Economics (CUFE) in Beijing, has partnered with the Shenzhen Stock Exchange (SZSE) and the Luxembourg Stock Exchange (LuxSE) to launch the CUFE-CNI Green Bond Index Series, the first Chinese Green Bond index to provide synchronous quotes between China and Europe. The new index series will act as a market benchmark and investment tool for Chinese green bonds.
The index series was launched at an event held in Beijing on Monday attended by LuxSE chief executive Robert Scharfe and Dean of the IIGF Dr. Wang Yao.
Speaking at the launch event, Mr. Scharfe said: “Today’s decision to launch and display three new indices tracking China’s green bond market is part of a joint effort to help bridge the gap between Europe and China, the world’s two largest green bond markets. Such cross-border cooperation is crucial if we are to build the necessary scale to successfully transition towards sustainable economies and achieve our global climate change targets.”
Dr. Wang Yao also commented: “As the first cross-border synchronous display of Chinese green bond index series, the publication of the index series will help raise the international influence of China’s green finance, attract foreign investors to participate in the construction of China’s green financial system and promote the development of green industries in China.”
The new index family was jointly developed by Shenzhen Securities Information Co., Ltd. (SSIC) and IIGF, and consists of three indices: the CUFE CNI High Grade Green Bond Index, the CUFE CNI High Grade Unlabeled Green Bond Index and the CUFE CNI High Grade Labeled Green Bond Index.
The CUFE-CNI Green Bond Index Series will become the benchmark of Chinese green bonds and is characterised by its broad representation of green bonds listed in China and high level of transparency. Statistics show that the annualised return of the CUFE CNI High Grade Green Bond Index since 2012 is 5.37%, the average remaining maturity of the latest index samples is 4.78 years, and the coupon rate is 4.4%.
As part of a cross-border cooperative programme between SZSE and LuxSE, the indices will be displayed on both LuxSE and SSIC’s official websites synchronously. Both parties have pledged to work closely to promote the listing of relevant green index fund products. SZSE and LuxSE signed a Memorandum of Understanding in 2013 to enhance communication and cooperation between the two exchanges. The launch of the CUFE CNI Green Bond Index Series is not only an achievement of deepened multi-field, cross-border collaboration between the two exchanges, but an ongoing initiative aimed at promoting the internationalisation of China's green finance market.
As the first cross-border synchronous display of a Chinese green bond index, the publication of this index will help improve the international influence of China’s green finance, attract foreign investors to participate in the construction of China’s green financial system and promote the development of green industry in China.
As one of the most important financial organisations in Chinese capital markets, SZSE is committed to building multi-tier markets to support innovation enterprises and service for small and medium-sized enterprises. Currently, there are over 1900 listed companies on the Shenzhen market with a total market capitalisation up to RMB23 trillion. As a wholly-owned subsidiary of SZSE, SSIC is specialised in planning, designing, daily operation, maintenance and marketing of SZSE and CNI indices series. In the field of green environmental protection, SSIC has launched a series of thematic indices, such as SZSE Environmental Protection, CNI TEDA EP.
IIGF, CUFE-CNI, the executive member of the Green Finance Committee, China Society for Finance & Banking, is dedicated to valuable and practical findings for green finance. It will also promote the development of green finance in China. IIGF is also the authorised organisation for certification and evaluation of green bonds.
LuxSE is the leading exchange for international securities in Europe with more than 3000 bond issuers representing over 100 different countries. LuxSE is also one of the largest offshore RMB trading centres on the continent and the largest venue for green bonds in Europe. In 2016, LuxSE launched the Luxembourg Green Exchange (LGX), a platform dedicated exclusively to green securities. More than 110 green bonds are currently displayed on LGX, representing an issuance value of almost EUR50bn.