Macau Business | April2024 | Special Report | Modern Finance
Hugo Maia Bandeira, a local lawyer specialised in banking and finance, stresses that Macau has benefited from mainland China’s strong support in developing the bond market. There is potential for companies from Brazil and Portugal to issue bonds in Macau, but a few hurdles must be tackled to make the SAR attractive in this field, says Mr. Bandeira, a founding partner at CFB Lawyers
Will Macau ever be able to compete with markets like Hong Kong or Singapore? If so, what will it depend on?
Hugo Bandeira – I believe Macau is poised to leverage its unique position and enjoy a competitive edge, particularly with the strong support it receives from mainland authorities. Macau has enjoyed significant support by the Central Government, notably in promoting the issuance of sovereign, provincial government and State-Owned Enterprises debt in Macau, and this has laid the foundation for creating a solid and stable market. In fact, due to this support, during the first half of last year, Macau outpaced Singapore in terms of international bond issuances. However, for this to become a sustainable trend and for Macau to establish a solid international reputation beyond casinos and tourism, it’s essential to acknowledge that Macau’s population of approximately 700,000, practically fully employed, is simply not enough to diversify the economy and bring much needed new ideas, innovation, and new businesses.
Do you believe it would be possible for a Portuguese or Brazilian company to issue bonds in Macau?
HB – I agree that there is potential for Macau to serve as a bridge between Portuguese-speaking countries and Mainland China institutional investors, especially considering its familiarity with the Portuguese language and legal system. However, there are several challenges that must be addressed to make this a reality.
Firstly, it is crucial that local banks and the government demonstrate a willingness and risk appetite to invest in projects in these countries and employ individuals with the requisite knowledge and experience in these markets (both in Macau and abroad). Without a solid understanding of the local landscape, it is very challenging to facilitate meaningful investment opportunities.
Furthermore, leveraging Macau’s competitive advantages, such as its legal system and use of the Portuguese language, is essential. However, it is concerning that there has been a decline (not to say absence…) in the availability of Portuguese-language materials from institutions such as AMCM (Monetary Authority of Macau), MOX, and MCSD (Macao Central Securities Depository and Clearing Limited) and, at times, even English materials are hard to come by. This trend, coupled with a decreasing emphasis on Portuguese as a working language in public services, poses a significant obstacle to the wishes of internationalisation.
Additionally, the logistical challenges faced by citizens and companies of Portuguese-speaking countries in opening bank accounts, obtaining visas to work or invest in Macau cannot be overlooked. These barriers hinder the attractiveness of Macau as a market, and faced with unreasonable obstacles and bureaucracy, companies and governments from these regions often end up taking their business elsewhere.
In conclusion, while there is potential for Macau to facilitate bond issuances for Portuguese-speaking countries, addressing the aforementioned challenges is paramount. It will require concerted efforts from both public and private stakeholders to create an environment conducive to cross-border investment and collaboration.]
How do you assess Hengqin role in this area ?
HB – Authorities in Hengqin have been very proactive in constantly implementing new measures or fine-tuning existing one to attract capital and residents to Hengqin. One can only expect that such proactiveness will increase in the future, but, of course, turning Hengqin into a go-to destination for issuers will take time.
Ultimately, patience is key, and a lot will also depend on the development of Macau’s bond market. Nonetheless, I do believe that, generally, the trend is positive and the authorities are doing a good job (which is only expected to improve in the future).]
