RMB round-up: RMB stays on upswing, RMB trade settlement drops to new low, HKEX to launch RMB options

In this round-up, the RMB is hangs on to its gains in the FX market, China sees RMB trade settlement sink to a four-year low, and Hong Kong Exchange (HKEX) is preps launch of offshore RMB (CNH) options contracts. Plus, a recap of our coverage this week.

  • By Paolo Danese
  • 17 Feb 2017
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This week:



FX


  • The PBoC dollar fix came in at 6.8456 on Friday, a sharp 173bp strengthening on the previous day. The onshore RMB (CNY) spot rate was moving in the same direction, up 0.1% to 6.8633 at 10:50am, according to Wind data. The offshore RMB (CNH) was still trading stronger at 6.8509, flat on the previous close. In the year so far, the CNY has appreciated 1.2%, while the CNH is up 1.7%.
  • The Thomson Reuters CNY index closed at 94.94 on February 16, nearly flat on last week’s close of 94.98. The dollar index meanwhile was trending lower, down 0.2% in the week to 100.52.
  • The director-general of the People’s Bank of China’s international department Zhu Jun said in an interview with China Securities Journal that the country’s sustained current account surplus will help prevent major adjustments in the renminbi. She was addressing concerns about the country’s FX reserves, which fell through the $3tr level last month for the first time in nearly six years. In addition, Zhu said recent measures introduced by Chinese regulators such as increased disclosure requirements on personal FX transaction should not be seen as an expansion of capital controls. Instead, they are merely the implementation of existing regulations.


Hubs:


  • Taiwan’s RMB deposits held up in January 2017, receding by 0.15% to Rmb310.7bn. Offshore banking units saw a 5.6% drop in the deposit base to Rmb33.6bn, while domestic ones saw a 0.5% uptick to Rmb277.2bn.
  • China’s cross-border trade settlement had another bad month, as capital controls and currency volatility continue to scare companies away from using the currency. The total trade settlement volume dropped 13.5% to Rmb322.4bn, the lowest level since February 2013.
  • The Ministry of Commerce’s 2016 review on Friday highlighted the progress China has made in terms of greater economic collaboration with the Arab States. These include getting various Chinese banks to launch renminbi operations, participate in local financing projects, and issue bonds domestically. And the authorities said they are confident such efforts would be further strengthened this year.


Derivatives news:

  • Investors will soon have a new instrument to manage their RMB exposure. The Hong Kong Stock Exchange (HKEX) will be launching a USD/CNH options on March 20 — the first currency option to be traded on the exchange. The contract size of a single option is $100,000 and the settlement price will be based on the USD/CNY (HK) spot rate published by the Hong Kong Treasury Markets Association at or around 11:30am on the expiry day. HKEX said the new product would complement its existing USD/CNH futures, which saw total trading volume rose 105% in 2016 to a record 538,594 contracts worth Rmb370bn ($54bn).


  • By Paolo Danese
  • 17 Feb 2017

Panda Bonds Top Arrangers

Rank Arranger Share % by Volume
1 CITIC Securities 44.72
2 China CITIC Bank Corp 22.36
3 Industrial and Commercial Bank of China (ICBC) 10.16
3 China Merchants Bank Co 10.16
3 Bank of China (BOC) 10.16

Bookrunners of Asia-Pac (ex-Japan) ECM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 May 2017
1 CITIC Securities 6,837.51 32 7.14%
2 China International Capital Corp Ltd 6,746.42 29 7.04%
3 Goldman Sachs 5,682.95 21 5.93%
4 China Securities Co Ltd 4,703.49 25 4.91%
5 UBS 4,459.61 23 4.65%

Bookrunners of Asia Pacific (ex-Japan) G3 DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 24 May 2017
1 HSBC 17,927.36 101 9.30%
2 Citi 15,452.58 89 8.01%
3 JPMorgan 12,180.99 61 6.32%
4 Morgan Stanley 9,251.45 43 4.80%
5 Standard Chartered Bank 8,766.36 56 4.55%

Asian polls & awards

  • RMB internationalisation: 10 questions for the market, part 2

    Every year, our sister publication Asiamoney carries out an Offshore RMB Poll. As part of that process, the magazine asks the market for its thoughts on important renminbi topics. In this third year, we received around 2,300 valid responses, up 3% on a year ago. The ten questions included a new one on the inclusion of onshore RMB assets in global indices. Here we present the answers to the final five questions.

  • RMB internationalisation: 10 questions for the market, part 1

    Every year, our sister publication Asiamoney carries out an Offshore RMB Poll. As part of that process, the magazine asks the market for its thoughts on important renminbi topics. In this third year, we received around 2,300 valid responses, up 3% on a year ago. The ten questions included a new one on the inclusion of onshore RMB assets in global indices. Here we present the answers to the first five questions.

  • Made in China: The best banks and deals of 2016

    You know who won, now find out why. GlobalCapital Asia and Asiamoney present the extended results of our 2016 China Deals and Investment Bank of the Year awards, recognising achievement both on and offshore.

  • Asia’s standout deals

    GlobalCapital Asia and Asiamoney present the extended results for our 2016 Best Country Deals. Discover why these bond, equity and loan transactions delivered outstanding outcomes for issuers and investors.

  • Aussie award winners: The best banks and deals of 2016

    The names have been announced, now find out why they stood out from the crowd. GlobalCapital Asia and Asiamoney present the extended results for our 2016 Australia Deals and Investment Bank of the Year awards, recognising achievement in equities, bonds, loans and investment banking.