The Luxembourg stock exchange has announced a new move to expand its cooperation with Macao, one of China’s Special Administrative Regions. The bourse said it will offer trading in securities listed on the Chongwa (Macao) Financial Asset Exchange Co. Ltd., commonly known as MOX, on its self-regulated Euro MTF market. This dual listing is expected to bring close to two billion euro worth of bonds from Macao into Luxembourg markets and further bolster ties between the two countries under China’s One Belt-One Road initiative.
LuxSE chief executive Julie Becker described this agreement as “an important next step” in their collaboration that began in 2020 when they signed a memorandum of understanding followed by an official cooperation agreement which saw MOX securities added to LuxSE’s official list for greater visibility and access across Europe. As part of this latest move, investors will now be able to trade these assets directly through LuxSE while also enjoying liquidity benefits from both exchanges simultaneously – something that could prove attractive for professional investors looking at diversifying their portfolios.
“Creating more connected capital markets is at the heart of LuxSE’s mission and we work to facilitate the access of new issuers from different parts of the world to our Euro MTF through close cooperation with selected exchanges, thereby providing more information and transparency around opportunities in new markets to international investors,” Becker said in a statement.
Fewer restrictions
In Europe, MTF markets come with fewer restrictions than traditional exchanges, thereby providing access to additional financial instruments, such as over-the-counter products. They earn money solely through commissions and do not require individual traders.
Macau, a former Portuguese colony, is a special administrative region of China, with executive, legislative, and judicial powers devolved from the national government. The colony remained under Portuguese rule until 1999, when it was transferred to China.
MOX President Mex Zhang, in a statement, said the cooperation received “strong support” by Macao’s regional government. He said that more than 17 billion Macao pataca (1.91 billion euro) in Macao bonds now also will be available via Luxembourg.
“MOX looks forward to exploring new opportunities for innovation and cooperation in financial markets with the Luxembourg Stock Exchange to improve the liquidity of the two capital markets and strengthen strategic cooperation in green finance to provide a new model for the international financial cooperation of One Belt and One Road Initiative,” Zhang said.
The Belt and Road Initiative is seen as a centrepiece of China’s President Xi Jinping’s foreign policy. It is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in more than 150 countries and international organisations.
Luring Luxembourg investors
Macao chief executive Ho Iat Seng on Monday with met with Luxembourg prime minister State Xavier Bettel as part of a three-country European tour to Portugal, Luxembourg and Belgium. Macao’s government information bureau said that it is “committed to upgrading and diversifying its economic structure, with modern finance playing a key role” on the agenda.
During his meeting with Bettel, Ho invited Luxembourg companies to invest in Macao, specifically in the Special Administrative Region - as Macao also is described - and the neighbouring cooperation zone with China. A Macao press report said Bettel, during his meeting, emphasized that Luxembourg has long regarded China as a cooperative partner and has always maintained a very friendly relationship. Bettel said Luxembourg hopes the two places will conduct exchanges on further deepening financial cooperation in the short term.
Speaking before his departure to Europe, Macao’s chief executive said his mission “would act closely in line with the report of the 20th National Congress of the Communist Party of China, while making good use of the advantages arising from the ‘One country, two systems’ principle, with a view to promoting more open cooperation and closer exchanges with other countries and regions”, according to Macao’s government information bureau.