The Luxembourg stock exchange on Tuesday said it will offer trading in Macao-listed securities on its self-regulated Euro MTF market. Close to two billion euro in Macao bonds will be dual-listed on the two exchanges. China, which controls Macao, sees the cooperation as part of its One Belt-One Road initiative.
The bourse said it has signed an agreement with representatives of Macao and China to extend its cooperation to securities listed on the Chongwa (Macao) Financial Asset Exchange Co. Ltd., a market known as MOX.
LuxSE chief executive Julie Becker described the agreement as “an important next step” in the collaboration that started in 2020. LuxSE and Macao’s MOX first signed a memorandum of understanding in January 2020. That was followed by a first cooperation agreement in 2020, under which MOX securities received a visibility boost in Luxembourg by adding them to LuxSE’s official securities list.
“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.