Last week JPMorgan and HSBC completed the first 15-year Hong Kong dollar interest rate swap in the interdealer market, according to officials at both firms. The transaction, with a notional size of HKD50 million (USD6.4 million,) traded through brokerage house Prebon Yamane. JPMorgan payed a fixed rate and received floating from HSBC. Steven Tsang, Hong Kong head of interest rate trading at HSBC, declined comment about the trade.
In recent weeks dealers started quoting prices for the 15-year curve on screens (DW, 4/3), following the launch of 12-year contracts last year (DW, 9/24).
"We're seeing hedging interest," said Aaron Poon, Hong Kong head of rates trading at JPMorgan, who added that the market in 15-year swaps is likely to grow slowly because of a lack of liquidity. "We'll probably see two-to-three trades a month--it'll be sometime before it trades on a daily basis," he added.
