Latest RMB People & Markets news
In this round-up, the Infrastructure Financing Facilitation Office appoints the first group of partner entities, RMB depreciation boosts trading activity in FX markets, and the RMB qualified foreign institutional investor scheme adds two participants in October. Plus, a recap of our top stories this week.
The Society for Worldwide Interbank Financial Telecommunication’s (Swift) latest RMB tracker shows that during the last two years, seven new countries are using the renminbi for more than 10% of their direct payments with China and Hong Kong.
Ever since it was announced by Chinese president Xi Jinping three years ago, the Belt and Road Initiative has been one of the most talked about policy strategies. While a level of scepticism remains, firms are starting to see opportunities emerge from the China-led initiative.
The Hong Kong Monetary Authority (HKMA) expanded the group of key offshore RMB (CNH) liquidity providers and revised arrangements for its CNH facility on October 27. The move comes at a time of greater downward pressure on the RMB, increasing the possibility of more interventions by China’s central bank.
In the nascent market for special drawing rights (SDR) denominated bonds, known as Mulan bonds, Standard Chartered (StanChart) managed to increase onshore investor interest in the first deal by a commercial lender in China.
China has made progress in liberalising its capital account this year, but the moves have yet to win over US-based investors, Luke Oliver, head of exchange-traded funds (ETF) capital markets at Deutsche Asset Management (DAM) told GlobalRMB.
RMB round-up: Clearstream launches China bond link, US banks vie for clearing role, CCB Tokyo enters China FX market
In this round-up, The BRICS bank announces its lending target for the next year, two US banks compete for RMB clearing role in New York, and China Construction Bank Tokyo gets admitted to the onshore foreign exchange market. Plus, a recap of our coverage this week.
Plans abound to connect China’s bond market with offshore counterparts but they have had little success until recently. Now Russia’s National Settlement Depository (NSD) is close to launching a link in the first half of 2017, Eddie Astanin, chairman of the executive board, told GlobalRMB.
The US took a step forward as a renminbi hub in September, when Bank of China New York branch was appointed as the local clearing bank. GlobalRMB met with a representative of the Working Group on US RMB Trading and Clearing to discuss new and future developments.
The US Treasury Department has maintained the view that China is not a currency manipulator in its second report to the congress on the foreign exchange policies of its major trading partners.
Preparations for the Shenzhen-Hong Kong Stock Connect are in full swing as the Hong Kong and Shenzhen stock exchanges embark on international roadshows ahead of its expected November launch.
There has been plenty of market attention this week on the movement of the onshore renminbi with China resuming normal service following the end of the Golden Week holidays. While the CNY did break through the psychological Rmb6.7 barrier against the US dollar, more volatility is expected thanks to a strengthening greenback.
It has been three years since China launched the landmark Shanghai Free Trade Zone with the area originally envisioned as the blueprint for further reforms throughout the country. While market participants are disappointed by the authorities’ continued grip on capital controls, they are happy with the overall direction of the FTZ scheme.
China’s reliance on a loose collection of market regulators has exacerbated market volatility, with the IMF welcoming plans for a total revamp of the financial markets institutional framework, according to Markus Rodlauer, former China mission chief and deputy director of the Asia and Pacific Department.
With the renminbi now officially part of the special drawing rights basket, China is set to push on with its goal of making the SDR a real-world investment and reserve asset. But the obstacles to that plan are daunting.
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GlobalRMB Panda Bonds league table
|Rank||Arranger||Total Volume Rmb (m)||No. of Deals||Share % by Volume|
|1||Bank of China (BOC)||7,500||5||21.01|
|2||Agricultural Bank of China (ABC)||4,000||2||11.20|
|4||Industrial and Commercial Bank of China (ICBC)||3,500||2||9.80|
Panda Bond Database
|Pricing Date||Issuer||Country||Size Rmb (m)|
|1||26-Oct-16||China Gas Holdings||China||2,000|
|2||12-Oct-16||The Wharf (Holdings)||Hong Kong||4,000|
|3||10-Oct-16||KWG Property Holding||Cayman Islands||8,000|
|4||29-Sep-16||Agile Property Holdings||Cayman Islands||3,000|
|5||23-Sep-16||Yuzhou Properties||Cayman Islands||3,000|
Offshore RMB Bond Top Bookrunners
|Rank||Bookrunner||Total Volume Rmb (m)||No. of Deals||Share % by Volume|
|2||Bank of China (BOC)||2,631||3||13.50|
|4||Standard Chartered Bank||1,700||2||8.72|
Latest Offshore RMB Bonds
|Pricing Date||Issuer||Country||Size Rmb (m)|
|1||25-Oct-16||ICBC Tokyo branch||China||500|
|2||20-Oct-16||ICBC Sydney Branch||China||1,200|
|3||08-Sep-16||Haikou Meilan International Airport Investment Ltd||China||525|
|4||08-Sep-16||ICBC Singapore Branch||China||1,600|
|5||02-Sep-16||Central American Bank for Economic Integration (CABEI)||Honduras||1,000|