This week in renminbi: April 18, 2017

China’s economy grows faster than expected in the first quarter of 2017, the head of State Administration of Foreign Exchange (Safe) meets with the deputy governor of the World Bank, and Citic says demand for cross-border financing activity is on the rise.

  • By Noah Sin
  • 18 Apr 2017
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FX:


  • People’s Bank of China (PBoC)'s renminbi fix against the dollar was set at 6.8849 this morning, up 64bp from Monday. In the spot market, the CNY was trading at 6.8888 as of 9.51am, with the CNH at 6.8833, down 0.12% and 0.08% from their previous close, respectively, according to Bloomberg data.
  • The dollar index was trading at 100.370 as of 8.19am, down 0.08% from the previous close, according to Bloomberg. The Thomson Reuters CNY reference index closed at 94.01 on Monday, down 0.2% from its previous close.
  • The trade-weighted index by CFETS closed at 93.18 on April 14, down 0.04% from the previous week, with the BIS basket and special drawing rights basket at 94.16 and 95.27, down 0.07% and up 0.02%, respectively.
  • Oesterreichische Nationalbank (central bank of Austria)Bank of Greece and HSBC have been approved to join the interbank foreign exchange market, according to a brief announcement by CFETS.


Economy:


  • China’s economy grew by 6.9% in the first quarter of 2017, up from 6.8% in the last quarter of 2016, according to figures released by the National Bureau of Statistics on April 17.
  • In a memo published on Monday, Bank of America Merrill Lynch said the growth figure exceeded analysts’ expectations and occurred in spite of PBoC’s monetary tightening.
  • “Despite property and monetary tightening measures, [first quarter] investment growth came in above expectations, mainly led by stronger private-sector investment amid improving profit conditions,” said the memo. “Solid investment demand and external demand recovery have in turn helped to boost industrial production growth, especially in the manufacturing sector.”


Regulators:

Indices:


  • Renminbi globalisation hit a three-year low in February this year, according to Standard Chartered’s renminbi globalisation index (RGI) report. The 6.4% drop to 1,786 is the largest month-on-month fall on record.
  • The report attributed renminbi’s retreat to tightening capital controls by Chinese regulators, highlighting the government’s dilemma in balancing internationalisation and currency stability.
  • “The latest RGI drop also adds conviction to our longstanding view that CNY stability comes at the expense of renminbi internationalisation,” said the report. “China achieved its first capital inflows in 34 months in February, but mainly because of less outward direct investment (ODI) and stricter capital controls on outflows.”
  • Citic Bank International Cross-border Banking Demand Index for Q2 of 2017 grew by 0.8 points from the last quarter to 57.2. The bank attributed the growing corporate confidence to steady Chinese economic growth, faster US economic recovery, and slowing renminbi depreciation.
  • Asked if monetary policy or warming US-China ties will change the trend of renminbi depreciation, Liao Qun, chief economist at Citic Bank International, told a press conference on April 12 that the currency is likely to depreciate even further, but will do so at a steadier pace than before.
  • “Renminbi will continue to depreciate because of the forthcoming rate hikes (by the Federal Reserve),” said Liao. “[But] the Chinese central government will not go against this trend. Rather, it will control the scale of renminbi depreciation, and ensure that it will not exceed the scale and pace of dollar appreciation.”
  • Bank of China’s Credits Investment and Financing Environment Difference (CIFED) Index gained 28.5 points in March, marking three consecutive months of gains in 2017. The bank noted a divergence in onshore and offshore debt markets, with rates of return edging higher in the onshore market.
  • On April 11, Shenzhen Securities Information (SSIC), Euronext and Sina signed a memorandum of understanding (MOU) to develop research on big data, stock indexes and cross-border index products. SSIC is a subsidiary of Shenzhen Stock Exchange (SZSE).


Payments:




  • By Noah Sin
  • 18 Apr 2017

Panda Bonds Top Arrangers

Rank Arranger Share % by Volume
1 Bank of China (BOC) 18.01
2 Everbright Securities 16.95
3 Agricultural Bank of China (ABC) 10.59
4 HSBC 6.99
5 Industrial and Commercial Bank of China (ICBC) 6.36

Bookrunners of Asia-Pac (ex-Japan) ECM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 19 Apr 2017
1 China International Capital Corp Ltd 5,979.41 23 8.62%
2 CITIC Securities 5,733.11 24 8.26%
3 Goldman Sachs 4,331.34 14 6.24%
4 China Securities Co Ltd 3,641.05 21 5.25%
5 UBS 3,599.31 16 5.19%

Bookrunners of Asia Pacific (ex-Japan) G3 DCM

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 25 Apr 2017
1 HSBC 13,882.10 82 9.23%
2 Citi 10,522.80 65 6.99%
3 JPMorgan 9,780.84 52 6.50%
4 Morgan Stanley 7,857.74 38 5.22%
5 Standard Chartered Bank 7,535.94 47 5.01%

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.