The week in renminbi: China unifies asset management rules, Philippines picks BOC for debut Panda, UBS AM launches first onshore equity fund

China’s financial regulators publish rules to standardise asset management regulations, the Philippines confirms Bank of China for its Panda bond debut, and UBS Asset Management’s China arm launches the first onshore equity fund by a foreign asset manager.

  • By Noah Sin
  • 20 Nov 2017
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Regulators:


  • China’s regulators are harmonising rules in the asset management industry in a bid to reduce risk in the financial sector, according to a November 17 joint announcement by the People’s Bank of China, China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission and the State Administration of Foreign Exchange.
    The draft rules force financial institutions to set aside 10% of their management fee as reserves for risk management, and forbid asset managers from guaranteeing a rate of return for their customers.
    The new rules will come into force on June 30, 2019. Products issued prior to the new rules’ publication can operate under the old rules until their maturity, but financial institutions may not issue any new products under the old rules between now and June 2019, according to a Q&A on the PBoC’s website.
  • CBRC has published a set of draft guidelines to curb single shareholder ownership of commercial banks, according to a November 16 statement by the regulator.
    The rules state that shareholders owning more than 5% of a commercial bank – or those owning less than 5% but ranked as one of the top ten shareholders of the bank – must register with the CBRC.
    Under the new rules, products such as funds and insurance plans can continue to purchase and hold bank shares, but products controlled by the same entity cannot account for more than 15% of a commercial bank’s stake. The rules are open to feedback from the public until December 15.


Bonds:

  • The Philippines’ Ministry of Finance has confirmed Bank of China as the lead underwriter and sole bookrunner of its debut Panda bond, as previously reported by GlobalRMB. The two parties signed the underwriting agreement on November 15 in Manilla, during Chinese premier Li Keqiang’s visit to the country.
    Carlos Dominguez, the Philippines’ finance secretary, previously told Chinese media that the sovereign will issue $200m worth of Panda bonds in November.

Investment:


  • UBS Asset Management’s wholly foreign-owned enterprise in China has launched the first onshore equity fund by a foreign asset manager, the company said in a November 20 press release.
    The fund, which will be available to institutional investors and high net worth individuals in China, will invest primarily in A-shares. It has already completed its initial fund offering to investors and is set to begin the registration process with the Asset Management Association of China, said UBS Asset Management.
    Wang Zizheng, the portfolio manager at UBS Asset Management (Shanghai) who will manage the fund, reckons the new product will capture opportunities in a growing Chinese economy.
    “From a long-term perspective, UBS Asset Management sees sustainable growth in the Chinese economy and opportunities in the A-share market,” he said. “Blue chip stocks in the A-share market are fairly valued and leading companies across numerous sectors are enhancing their international competitiveness, leading to attractive investment opportunities.”
    In July, UBS Asset Management (Shanghai) became the first Qualified Domestic Limited Partner licence holder to receive a private fund management licence, according to the press release.


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  • By Noah Sin
  • 20 Nov 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 22-Nov-17 Province of British Columbia Canada 1,000
2 15-Nov-17 Daimler Germany 4,000
3 13-Oct-17 Global Logistic Properties Singapore 1,000
4 19-Sep-17 Skyworth Digital Holdings China 2,000
5 14-Sep-17 Bank of China (Hong Kong) (BOCHK) China 9,000

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