Our most recent stories:
- The Brics New Development Bank (NDB) is planning to issue up to Rmb5bn ($746m) of bonds in China by the end of the year, the bank’s president said. NDB's chief financial officer told GlobalRMB the move will help the bank fulfil its goal of becoming a regular borrower in the onshore market.
- BMW’s China arm sealed its second auto loan asset backed securities (ABS) of the year, taking home Rmb4bn on August 8, less than a week after Nissan’s China joint venture visited the market.
- The Hong Kong Exchange will scrap its China Ministry of Finance treasury bond futures by December, less than a year after the product’s debut on April 10, according to the bourse’s interim report.
- Financial institutions must make assessing and preventing environmental risk a priority, chief economist of the People’s Bank of China said at a recent event held in Beijing.
- China’s FX reserves grew for the sixth consecutive month in June, according to the State Administration of Foreign Exchange (Safe) on August 7. The size of the reserves stood at $3.08tr by the end of July, which marked a month-on-month increase of 0.8% or $239m.
Julian Evans-Pritchard, China economist at Capital Economics, said the figures demonstrate the pressure of capital outflows has abated.
“Capital outflows have eased markedly since the start of the year and are now mostly offset by the trade surplus,” wrote Evans-Pritchard in an August 7 note. “This shift should prove supportive of the renminbi, which we think will strengthen against the US dollar during the next couple of years.”
Evans-Pritchard also noted the figures may mark the first month since October 2015 in which the PBoC was not a seller of FX. But that will not be confirmed until the central bank publishes its balance sheet later in August.
- The PBoC’s renminbi fix against the dollar was set at 6.6642 this morning, 128bp stronger than Thursday, whereas NEX Data’s
EBSUSDCNH benchmark rate was 6.6948 at 4.30pm on Thursday.
- In the spot market, the CNY was trading at 6.6693 as of 11.40am, with the CNH at 6.6866, down 0.34% and 0.30% from their previous close, respectively, according to Bloomberg data.
- The dollar index was trading at 93.363 as of 11.30am, down 0.04% from the previous close, according to Bloomberg. The Thomson Reuters CNY reference index closed at 94.94 on Thursday, up 0.17% from its last close.
- Hong Kong’s chief executive, Carrie Lam, met with Zhou Xiaochuan, governor of the PBoC, on August 8. The pair discussed the development of Hong Kong’s offshore renminbi business, the city’s participation in One Belt One Road (OBOR), and enhancing financial co-operation between the two markets.
- Lam also met with several other regulators in Beijing, including He Lifeng, chair of the National Development and Reform Commission (NDRC). Following the meeting, the Hong Kong government and the NDRC agreed to begin discussions on signing a bilateral agreement on Hong Kong’s role in OBOR. This will outline the areas in which Hong Kong will participate, such as financing and fundraising, according to an August 8 statement by the city's government.
- Harvest Fund Management has launched the first domestically listed ETF index tracking a FTSE Russell index, according to a statement by the index provider. The asset manager listed the Harvest FTSE China A50 Index ETF on Shanghai Stock Exchange on August 7.
- ETF fund manager WisdomTree has added A-shares to two of its ETFs, according to an August 8 press release. The 50 largest private onshore-listed companies will be added to the underlying indices of the WisdomTree China ex-State-Owned Enterprises Index and the WisdomTree Emerging Markets ex-State-Owned Enterprises Index, which will have a 25% and 5% cap for A-shares, respectively.
- StanChart’s RGI suffered a 4.8% month-on-month fall in June, the bank said on August 7. The index, which measures activities in offshore renminbi centres, reached 1,622 points by the end of June, the lowest since January 2014.
Kelvin Lau, senior economist, Greater China, at StanChart, blamed falling cross-border renminbi payments and the stagnant dim sum market – issuance volume for which reached the lowest point since January – for the index’s fall. But he argued there are reasons to be optimistic.
“Recent comments from PBoC officials and state media have called for a freer CNY, fuelling talk of a widening of the daily trading band,” wrote Lau in the August 7 report. “Such a move would send a strong signal to the market without creating much immediate risk (as the current +/-2% band has not been fully utilised).”
- The Singapore Exchange released its monthly statistics for July, showing USDCNH futures volume stood at 150,567 contracts – down 8% month-on-month and up 416% year-on-year. Meanwhile, FTSE China A50 Index Futures remained the most active contract on SGX with a volume of 5.6m contracts, down 7% month-on-month and up 11% year-on-year.