This week in renminbi: June 5, 2017

In this week's round-up, the People’s Bank of China says it will maintain a neutral monetary policy, Silk Road Fund and European Investment Fund sign memorandum of understanding for Belt and Road financing, and Luxembourg holds international renminbi forum.

  • By Noah Sin
  • 05 Jun 2017
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FX:


  • The PBoC’s renminbi fix against the dollar was set at 6.7935 this morning, 135bp stronger from Friday. In the spot market, the CNY was trading at 6.8047 as of 10.13am, with the CNH at 6.7807, up 0.08% and down 0.06% from their previous close, respectively, according to Bloomberg data.
  • The dollar index was trading at 96.781 as of 10.00am, up 0.07% from the previous close, according to Bloomberg. The Thomson Reuters CNY reference index closed at 93.87 on Sunday, down 0.3% from its last close.
  • The CFETS trade-weighted index closed at 93.16 on June 2, up 0.8% from the previous week, with the BIS basket and special drawing rights basket at 94.06 and 94.40, up 0.8% and 0.7%, respectively.


Regulators:


  • A PBoC deputy governor has said that China will not seek to tighten or loosen its monetary policy, according to local media reports. Speaking at a forum at Tsinghua University on June 3, Chen Yulu said that the central bank will maintain a stable level of liquidity as China undergoes supply side reforms, and guide financial institutions towards serving the needs of the real economy.
  • Brazil and China jointly launched a fund for capacity co-operation on May 30, according to PBoC. The fund will work with a market-oriented operating mechanism and promote strategic co-operation between the two countries. The launch ceremony took place in São Paulo, Brazil, and was attended by the head of State Administration of Foreign Exchange (Safe), Pan Gongsheng.
  • Onshore financial institutions will need to send all their data on overseas credit card transactions worth over Rmb1,000 ($147.2) to Safe, according to an announcement by the regulator on June 2. Safe said the new rule, which will come into force on September 1, will increase transparency in cross-border credit card transactions. It added that it is not an adjustment of FX management policy on the use of credit cards abroad.


One Belt One Road:


  • Silk Road Fund (SRF) and European Investment Fund (EIF) have signed an MOU to finance Belt and Road projects and the Investment Plan for Europe, the European Commission’s flagship programme to boost investment across the continent.
  • Together, SRF and EIF will invest €500m ($443.7m) in the initial stages, mainly into private equity funds and venture capital funds that support small and medium-sized enterprises and mid-caps, which have or will develop connections with China. The MOU came after premier Li Keqiang’s meeting with Jean-Claude Juncker, president of the European Commission, on June 2.
  • Li and Juncker also agreed to promote co-operation on Belt and Road and the Investment Plan for Europe via development banks, such as Asian Infrastructure Investment Bank, European Investment Bank and European Bank for Reconstruction and Development, according to China’s State Council.
  • China Development Bank signed an MOU with Deutsche Bank on May 31, committing to invest $3bn in Belt and Road projects over the next five years. The two firms said they will finance projects that will benefit their clients through joint lending and project finance. The signing of the MOU took place during Li’s visit to Germany.


FTZs:

Hubs:


  • The government of Luxembourg held the forth international forum on renminbi on June 1. Delegates discussed China’s efforts to open up its capital markets to foreign investors, including the Stock Connect and renminbi qualified foreign institutional investor (RQFII) programme.
  • Speaking at the forum, Pierre Gramegna, Luxembourg’s minister of finance, said the country will seek to co-operate with the Mainland on green finance.
  • “Not only do Chinese banks list green bonds in Luxembourg, but partnerships have been created between stock exchanges to create the first Chinese green bond index, which provides quotes between China and Europe using Luxembourg’s Green Exchange,” said Gramegna.


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  • By Noah Sin
  • 05 Jun 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 28.62
2 CITIC Securities 21.06
3 China CITIC Bank Corp 9.72
4 China Merchants Bank Co 9.18
5 Industrial and Commercial Bank of China (ICBC) 7.56

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 12-Jan-18 Mitsubishi UFJ Financial Group (MUFG) Japan 1,000
2 12-Jan-18 Mizuho Bank Japan 300
3 10-Jan-18 Daimler Germany 3,000
4 22-Nov-17 Province of British Columbia Canada 1,000
5 15-Nov-17 Daimler Germany 4,000

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 55.56
2 CLSA 22.22
2 Mitsubishi UFJ Financial Group (MUFG) 22.22

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 17-Jan-18 IL&FS Transportation Networks India 100
2 10-Jan-18 IL&FS Transportation Networks India 900
3 08-Jan-18 Westpac Australia 500
4 30-Nov-17 Ministry of Finance of the People's Republic of China (MoF) China 7,000
5 15-Nov-17 Bank of China Paris Branch (BOC Paris) China 1,000