RMB round-up: FX reserves rise for fourth consecutive month, China to open up domestic futures market, Ford China’s financial arm issues RMB bonds

China’s FX reserves rise for the fourth consecutive month in May, a Chinese securities regulator says the country will start allowing foreign investors to trade commodities futures onshore, and Ford Motor’s onshore financial arm issues RMB-denominated bonds.

  • By Noah Sin
  • 09 Jun 2017
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  • People’s Bank of China's renminbi fix against the dollar was set at 6.7971 this morning, 41bp weaker than Thursday. In the spot market, the CNY was trading at 6.7988 as of 4.25pm, with the CNH at 6.7912, down 0.07% and 0.13% from their previous close, respectively, according to Bloomberg data.
  • The dollar index was trading at 97.435 as of 4.11pm, up 0.53% from the previous close, according to Bloomberg. The Thomson Reuters CNY reference index closed at 94.25 on Friday, up 0.23% from its previous close.
  • The size of China’s FX reserves stood at $3.054tr at the end of May, up $24bn or 0.8% from April, according to monthly figures released by Safe on Wednesday.
  • This is the fourth consecutive month of growth for China’s FX reserves with Julian Evans-Pritchard, China economist at Capital Economics, saying that the May data also reflects a change in PBoC’s policy.
  • “The three previous increases were entirely due to valuation effects rather than a return to FX accumulation by the PBOC,” wrote Evans-Pritchard in a memo on June 7, referencing the weakening of the dollar in that period. “[But in May] the PBoC appears to have begun purchasing FX in small quantities again after having sold FX to prop up the renminbi for 18 straight months […] This is a major shift in policy that has been achieved thanks to an easing of capital outflows.”


  • China will allow foreign investors to begin trading crude oil and iron ore futures in the onshore market, said Jiang Yang, vice-chairman of China Securities Regulatory Commission (CSRC). Speaking at a conference on June 6, Jiang said China will seek to improve the Qualified Foreign Institutional Investor (QFII) and RMB QFII (RQFII) programmes, further open its domestic market and encourage the involvement of long term institutional investors from overseas.
  • Jiang also suggested that companies from OBOR countries should issue Panda bonds to raise funds, citing Russian company Rusal’s debut Panda bond in March as an example.


  • It is no longer tenable for MSCI to exclude Chinese A-shares in its benchmark index, according to China’s state-owned newspaper Global Times. The Communist Party’s mouthpiece said in a June 7 article that China has made enough regulatory changes for the index provider to include A-shares.
  • “The continued absence of yuan-denominated A-shares from one of the world's most followed indexes tracking emerging market stocks is unhelpful not only for China's equity market, but increasingly for the New York-based index compiler,” said Global Times. “Hopefully there won't be any unwanted surprises this summer.”
  • MSCI said in a May 22 statement that it will make its decision on A-share inclusion public on June 20 at 10:30pm Central European Summer Time.
  • The Bank of China Cross-border RMB Index (CRI) stood at 233 points at the end of Q1 2017, up four points from the end of 2016. The bank admitted that the decline of the renminbi as a settlement currency has weighed on the index, but projected that the index will stay around 230 points in Q2.
  • “Improvement in China’s macro-economy, more balanced renminbi cross-border flows, and the addition of the counter-cyclical factor to the renminbi fixing formula will all help the renminbi’s exchange rate stay stable, and provide the basis for renminbi’s cross-border activity to, by and large, maintain its stability,” said Bank of China.


  • JP Morgan’s chief executive has praised China for opening up its financial market. Speaking to Bloomberg on June 5, Jamie Dimon said JP Morgan is planning to apply for a bond trading licence, having obtained an underwriting licence in February, and could consider setting up a wholly-owned entity in the market, after deciding to exit a joint venture with First Capital Securities in December 2016. Dimon also suggested that renminbi could become a fully convertible currency within 10 years.

Clearing bank:


  • According to monthly statistics released by the Singapore Exchange (SGX), FTSE China A50 Index futures remained the most active product in May with a volume of 5.86m contracts, up 13% month-on-month and 7% year-on-year. Meanwhile, SGX USDCNH futures recorded a volume of 106,409 contracts in May, up 37% month-on-month and up 247% year-on-year.


  • Ford Motor Credit (China) is issuing two tranches of renminbi-denominated bonds, according to documents filed with CFETS. The company’s China subsidiary aims to raise Rmb1.5bn with one tranche of three year notes and another Rmb1.5bn with a tranche of two year notes, providing an indicative range of 4.5%-5.5% for the former and 4.8%-5.8% for the latter. The settlement date for both tranches is June 12. The bonds are rated AA+ by domestic credit rating agency, Lianhe Credit Rating.
  • Russia is putting the issuance of its first sovereign renminbi-denominated bond on hold, according to a June 6 Reuters report. The plans fell apart as China insisted that Russia should issue onshore renminbi-denominated bonds, or Panda bonds, whereas Russia wanted to raise renminbi debt in its home market for Chinese investors to buy.
  • "We have decided that Panda bonds are a generally available instrument, which is not really interesting and efficient from the point of view of our market development," said Sergei Storchak, Russia’s deputy finance minister. "[This is] especially [the case] given that we could easily compensate the absence of yuan borrowing with borrowing in rubles.”

Belt and Road:

  • A PBoC deputy governor has said that China will improve cross-border renminbi payment and settlement facilities to increase the use of renminbi in OBOR countries, according to China Daily.
  • “There are more than 50 Belt and Road economies where the proportion of renminbi usage in cross-border transactions is lower than 5%," Yin Yong told a forum in Beijing on June 7. "PBoC will continue to improve the renminbi cross-border payment framework and make the renminbi play an important role in pricing, settlement, investment, financing and trade.”
  • China Citic Bank and China Shuangwei Investment are acquiring a 60% stake in Kazakhstan’s JSC Altyn Bank from the local financial group JSC Halyk Bank. The relevant parties signed the deal on June 7, during Chinese president Xi Jinping’s visit to the country. The deal will be completed in the second half of the year.
  • Standard Chartered is organising roadshows for One Belt One Road business opportunities in Africa, South Asia and Association of Southeast Asian Nations (ASEAN) countries, according to Xinhua. StanChart’s representatives told a press conference that it will focus on building client and external stakeholder communications on the roadshow.
  • By Noah Sin
  • 09 Jun 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 China Merchants Securities Co 21.76
2 Agricultural Bank of China (ABC) 15.11
2 CITIC Securities 15.11
4 China CITIC Bank Corp 13.60
5 Industrial and Commercial Bank of China (ICBC) 10.58

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 09-May-18 Daimler Germany 5,000
2 26-Apr-18 Global Logistic Properties via Iowa China Offshore Holdings Hong Kong 1,500
3 26-Apr-18 Trafigura Singapore 500
4 23-Apr-18 CAR Inc Hong Kong 730
5 11-Apr-18 China Jinmao Holdings China 3,000

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 36.83
2 HSBC 14.94
3 Bank of Taiwan 4.77
3 Cathay United Bank 4.77
5 Societe Generale Securities Services 4.13

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 23-May-18 QNB Finance Qatar 600
2 16-May-18 First Abu Dhabi Bank PJSC United Arab Emirates 1,100
3 04-May-18 Busan Bank South Korea 500
4 27-Apr-18 Central American Bank for Economic Integration (CABEI) Honduras 2,000
5 24-Apr-18 CAR Inc China 350