RMB round-up: PBoC says foreign companies to be treated equally, Invesco and Value Partners win PFM licences, Goldman sets up fund with CIC

The deputy governor of the People’s Bank of China says foreign companies will be treated on an equal basis with their Chinese peers, two foreign fund managers obtain private fund management (PFM) licences through their wholly foreign owned enterprises (WFOE), and Goldman Sachs sets up an investment fund with China’s sovereign wealth fund targetting US companies.

  • By Noah Sin
  • 10 Nov 2017
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Regulators:

  • China will introduce a uniform negative list across the country in 2018, Yi Gang, deputy governor of the PBoC, was quoted by local media as saying. He said companies operating in China, whether they are Chinese or foreign enterprises, and regardless of their size, will be treated equally with the same market access requirements.

WFOEs:

  • Invesco and Value Partners have received approvals for their respective Private Fund Management (PFM) licences in China, the companies said in separate press releases on Friday. The licences will allow the WFOEs of the two companies to sell funds to eligible institutional and high net worth investors in China.
    The licence will allow Invesco to provide a wider variety of products to domestic investors, said Andrew Lo, head of Asia Pacific at Invesco.
    “The private fund manager registration allows us the ability to manage and distribute a wide range of unique investment offerings to China’s vast network of private fund investors,” he said. “We are committed to bringing a new diversity of differentiated investment offerings to the onshore Chinese market.”
    A spokesperson told GlobalRMB that Invesco will set up its fund under the new licence within six months.

Investment:

  • China Investment Corporation, China's sovereign wealth fund, is setting up a $5bn fund with Goldman Sachs (GS) to make private equity investments in American companies, according to a November 9 press release by GS. The fund, named China-US Industrial Cooperation Partnership, will target companies in the manufacturing, industrial, consumer and healthcare industries.
    The formation of the new fund will benefit both China and the US, said Lloyd Blankfein, chairman and CEO of Goldman Sachs.
    “The China-United States relationship is one of the most important in the world and strengthening economic and trade cooperation is vital to the economies of both countries,” he said in the press release. “The Cooperation Fund will increase Chinese investment in the United States, creating more opportunities for American workers and contributing to China’s economic transition and growth.”

Bonds:

  • Foreign ownership of Chinese bonds hit a record high in September, reaching Rmb1.1tr ($150.9bn), up from Rmb1tr in August, according to CEIC data.
  • Some 184 international investors participated in Bond Connect between July 3 and 30 September, according to Hong Kong Exchange and Clearing’s third quarter results report, released on Wednesday. The report also noted that 24 onshore dealers, 50 Hong Kong local custodians and 19 Hong Kong foreign exchange settlement banks have been involved in the scheme in the first two months of its operation.

FX:

  • The size of China’s FX reserves stood at $3.1tr at the end of October, up $700m month-on-month, according to figures released by the State Administration of Foreign Exchange on November 7.
  • By Noah Sin
  • 10 Nov 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