The week in renminbi: Venezuela uses RMB for oil pricing, PBoC says bankers bullish about economy, SZ-HK Connect volumes hit new high

Venezuela replaces the dollar with the renminbi as the quoting currency for its oil exports, the People’s Bank of China says bankers are confident about the Chinese economy, and the Shenzhen-Hong Kong Stock Connect sets a new record in turnover volume.

  • By Noah Sin
  • 18 Sep 2017
Email a colleague
Request a PDF

Commodities:

  • The Venezuelan oil ministry has begun publishing the weekly price of crude oil in renminbi, indicating that it will accept the Chinese currency instead of the dollar as the payment currency for its oil export. The price for a barrel of oil stood at Rmb306.26 ($46.76) for the week of September 11-15.
    Another media report claimed on September 13 that Venezuela would replace the dollar with the euro as the preferred oil invoicing currency as the country tries to bypass US economic sanctions.

Regulators:


  • A bankers’ macroeconomic confidence index published by the PBoC for the third quarter stood at 75.3%, up 7.5% from the last quarter, according to a report by the central bank published on September 15. This is a record high for the index since it launched in the fourth quarter of 2014.
    Another survey reported that 22.1% of bankers thought the PBoC’s monetary policy was too tight, down 8% from the last quarter. Some75% considered the central bank’s monetary policy as appropriate, up 8.5% in the same period.
    The two results came from a quarterly survey by the PBoC, which interviews around 3,200 institutions across China, including foreign commercial banks.
  • The China Securities Regulatory Commission held a seminar on monitoring financial markets with the International Monetary Fund on September 13. The seminar was the first collaboration between the CSRC and IMF under the framework of their memorandum of understanding on regulating financial markets and controlling systemic risk, said the CSRC. The MoU was signed in 2016.
    Officials from the PBoC met with their Russian counterparts in Sochi on September 13. The officials discussed the bilateral promotion of local currency settlement, deepening co-operation between banks, and further collaborations on payment systems, financial markets and the insurance sector.
    Zhou Xiaochuan, the PBoC’s governor, attended the ninth tripartite central bank governors’ meeting with his counterparts from Japan and South Korea on September 13-14.


MoUs:

  • China Development Bank (CDB) has signed a Memorandum of Understanding with the Central Bank of Iran to provide €15bn of funding for development projects, according to an Iranian media report. The MoU was signed on September 15, during a meeting between Iranian central bankers and Hu Huaibang, the CDB’s chairman in Beijing.
  • Meanwhile, state-owned investment company CITIC Trust signed a deal with five Iranian banks on September 14 to provide $10bn in funding for water management, energy, environment and transport projects in Iran, according to a local media report.

Stock Connect:

  • Daily northbound turnover for the Shenzhen-Hong Kong Stock Connect hit Rmb5.92bn on September 15, the highest daily turnover since the scheme launched in 2016, according to Hong Kong Exchanges and Clearing.

Trade:

  • The aggregate non-financial foreign direct investment from China between January and August was $68.7bn, down 41.8% year-on-year, according to the Ministry of Commerce (MofCom) on September 14. MoFCom said the decline in outbound investment reflects the slowdown in what it considers as irrational investment abroad.
  • In that same period, Chinese investment in 52 Belt and Road countries reached $8.55bn, which made up 12.4% of all non-financial outbound investment and marked a year-on-year rise of 4.3%, according to MoFCom.

FX:


  • The PBoC’s renminbi fix against the dollar was set at 6.5419 this morning, 4bp stronger from Friday. The NEX CNH benchmark came in at 6.5473 at 4.31pm on Friday, firmer from 6.5572 on Thursday.
    The dollar index closed at 91.872 on Friday, down 0.27% from Thursday, according to Bloomberg. The Thomson Reuters CNY reference index closed at 95.94 on Sunday, up 0.05% from its previous close.
    The trade-weighted index by CFETS closed at 94.86 on September 15, down 0.3% from the previous week, with the BIS basket and special drawing rights baskets at 95.61 and 95.73, down 0.2% and 0.49%, respectively.


Our most recent stories:

Comment:

Panda bonds:

Securitization:

Policy:

Investment:

Belt and Road:

  • By Noah Sin
  • 18 Sep 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 37.58
2 JP Morgan 18.57
3 HSBC 16.29
4 Credit Agricole 12.53
5 Barclays 3.76

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 19-Oct-17 Commonwealth Bank of Australia (CBA) Australia 1,500
2 11-Oct-17 BMW Finance NV The Netherlands 1,000
3 11-Oct-17 BOC Aviation Singapore 1,000
4 28-Sep-17 National Bank of Canada Canada 600
5 22-Sep-17 Royal Bank of Canada Canada 900