The Shenzhen Stock Exchange and the Luxembourg Stock Exchange have teamed up with the International Institute of Green Finance, part of the Central University of Finance and Economics in Beijing, to launch the CUFE-CNI Green Bond Index Series, the first Chinese Green Bond index to provide simultaneous quotes between China and Europe. The new index series will act as a market benchmark and investment tool for Chinese green bonds.

The new index family was jointly developed by Shenzhen Securities Information and the institute, and consists of three indices: High Grade, the High Grade Unlabeled and the High Grade Labeled Green Bond.

Backtesting shows that the annualised return of the high grade index since 2012 is 5.37%, the average remaining maturity of the latest index samples is 4.78 years, and the coupon rate is 4.4%, according to the exchanges. 'Such cross-border cooperation is crucial if we are to build the necessary scale to successfully transition towards sustainable economies and achieve our global climate change targets,' said chief executive Robert Scharfe (pictured), chief executive of the Luxemboug Exchange in a statement.

The agreement to develop the new index series is part of a cross-border cooperative programme between the two exchanges, with the indices to be displayed on their websites. The two exchanges signed a memorandum of understanding in 2013 to enhance communication and cooperation.

The Luxembourg Exchange is also one of the largest offshore renminbi trading centres in Europe and the largest venue for green bonds. In 2016, the exchange launched the Luxembourg Green Exchange, a platform dedicated exclusively to green securities. More than 110 green bonds are displayed on the platform, with sales of almost EUR50bn, according to the exchange.

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