Major local banks such as the Hongkong and Shanghai Banking Corporation completed several offshore yuan bond repurchase transactions using onshore China bonds as collateral today, the first day of the offshore repo arrangement’s launch.

Repo deals are short-term borrowings under which securities are sold to investors and bought back later at a slightly higher price.

Bank of China Hong Kong (2388), Standard Chartered (2888) and Hang Seng Bank (0011) were among the first banks to execute offshore yuan repo transactions.

The trades were carried out for several overseas and Hong Kong institutional investors, including banks, securities firms and hedge funds.