UPDATE 1-Hong Kong Exchange to work quickly to build a China bond connect scheme

HONG KONG, May 24 (Reuters) - The operator of Hong Kong’s stock exchange said on Tuesday it will “work very quickly” on a plan to link bond markets in China with those in the Asia’s financial centre, giving global investors more access to yuan-related assets.

The concept would be similar to a landmark program which connected the Hong Kong and Shanghai stock markets in 2014, said Charles Li, chief executive of Hong Kong Exchanges and Clearing (HKEx).

The plan would allow global banks to further develop offshore yuan interest rate products, Li said.

“So we probably will work very quickly, trying to build a bond connect in a similar fashion and manner to the stock connect,” Li said.

China said earlier this year it is opening up its interbank bond market to foreigners to provide more avenues for investment. Moody’s rating agency estimates China’s onshore bond market had a total 48.5 trillion yuan ($7.5 trillion) of outstanding bonds at end-2015, the third largest globally after the U.S. and Japan.

The Shanghai-Hong Kong Stock Connect had promised to open up China’s capital markets to foreign investors, heralding bolder stock market reforms with the ultimate goal of full capital account convertibility.

But an onshore stock market crash in 2015 and weak markets -- Chinese stocks are among the worst performing in Asia this year -- have discouraged many potential investors, prompting the exchange to widen its focus to adding more currency and fixed-income products to its menu.

On Tuesday the Hong Kong bourse and Thomson Reuters signed an agreement for the creation of a new series of Renminbi (RMB) indices, details of which will be announced in the next few weeks.

The new index series will offer global investors benchmarks that reflect the development of the yuan’s effective exchange rate against other major currencies and are designed to be transparent and tradeable.

Li said 2016 will be a big product year focusing on the yuan foreign exchange rate.

The HKEx has received regulatory approval to launch cash-settled Euro-Yuan, Japanese yen-Yuan, Australian dollar-Yuan and Yuan-US dollar futures on May 30. (Editing by Kim Coghill)