RMB round-up: BlackRock backs A-shares in MSCI, former Safe official says China should open onshore CNY market, Capital outflows reach 30-month low

BlackRock has backed MSCI to include A-shares in its benchmark index, a former State Administration of Foreign Exchange (Safe) official says China should open its onshore renminbi market, and Standard Chartered says capital outflows reach a new low in March.

  • By Noah Sin
  • 21 Apr 2017
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Key developments this week:



FX:


  • People’s Bank of China (PBoC)'s renminbi fix against the dollar was set at 6.8823 this morning, up 31bp from Thursday. In the spot market, the CNY was trading at 6.8834 as of 4.43pm, with the CNH at 6.8830, down 0.02% and up 0.01% from their previous close, respectively, according to Bloomberg data.
  • The dollar index was trading at 99.772 as of 4.36pm, down 0.01% from the previous close, according to Bloomberg. The Thomson Reuters CNY reference index closed at 93.86 on Friday, up 0.1% from its previous close.
  • China had its smallest non-FDI capital outflows ($14.7bn) since September 2014 in March, according to a report published by Standard Chartered on Friday. The report said this phenomenon may lead to gradual loosening of capital controls. “The prospect of more balanced cross-border flows has prompted Beijing to take its first small steps in relaxing window guidance on outflows,” said StanChart’s report.


Indices:

  • BlackRock has backed MSCI to include Chinese A-shares in its benchmark emerging markets (EM) index in June this year, according to The Wall Street Journal. The world’s largest asset manager said the technical issues, which stopped MSCI from including A-shares for three times, have been resolved. GlobalRMB previously reported that BlackRock’s head of equities expressed in March that she is confident that MSCI will include A-shares this year.

Regulators:


  • PBoC will take into account the possible market impact when introducing new restrictions on shadow banking, according to the central bank’s chief economist. Speaking at a forum in Washington on April 20, Ma Jun said regulators don’t want the market to over interpret its regulatory action, according to a report by Bloomberg.
  • A former Safe official has urged China to allow more market participants to trade renminbi onshore. Speaking at the Finance 40 Forum on April 20, Guan Tao, a former director of international payments at Safe, said the onshore market is dominated by banks which do not have a lot risk appetite, without which there cannot be price recovery in renminbi.


Stock Connect:



  • By Noah Sin
  • 21 Apr 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 28.15
2 CITIC Securities 21.52
3 China CITIC Bank Corp 9.93
4 China Merchants Bank Co 9.38
5 Industrial and Commercial Bank of China (ICBC) 7.73

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 13-Oct-17 Global Logistic Properties Singapore 1,000
2 19-Sep-17 Skyworth Digital Holdings China 2,000
3 14-Sep-17 Bank of China (Hong Kong) (BOCHK) China 9,000
4 05-Sep-17 Joy City China 1,000
5 01-Sep-17 Rusal Russian Federation 500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 31.63
2 BNP Paribas 16.57
3 HSBC 14.01
4 JP Morgan 13.39
5 Credit Agricole 11.30

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 15-Nov-17 Bank of China Paris Branch (BOC Paris) China 1,000
2 02-Nov-17 Hitachi Capital (UK) United Kingdom 500
3 27-Oct-17 Korea Development Bank (KDB) South Korea 1,400
4 19-Oct-17 Commonwealth Bank of Australia (CBA) Australia 1,500
5 11-Oct-17 BMW Finance NV The Netherlands 1,000