RMB round-up: PBoC hold-up delays Philippines Panda debut, HKEX targets Southeast Asia with Singapore office, RMB falls in global payments race

The Philippines postpones its Panda bond deal as it awaits approval from China’s central bank, Hong Kong Exchanges and Clearing (HKEX) opens its first office in Singapore, and the renminbi falls to seventh place in the league table of the world’s most used payments currency in October.

  • By Noah Sin
  • 01 Dec 2017
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Bonds:


  • The Philippines has delayed its planned $200m debut Panda bond issuance, Carlos Dominguez, the country’s secretary of finance, told media on Wednesday.
    The sovereign is still waiting for approval from the People’s Bank of China and will hit the onshore market in the first quarter of 2018, instead of 2017 as previously stated, said Dominguez. He added that the sovereign will consider market conditions before finalising the timing of the issuance. The news came after the Philippines said Bank of China the sole bookrunner and lead underwriter for the deal on November 15, according to a Bank of China statement.
  • China would like to attract more Central and Eastern and European (CCE) sovereign issuers to its domestic bond market, Li Keqiang, premier of China, said in a November 27 speech in Budapest.
    “We support companies from CEE countries in issuing Panda bonds in China, and support financial institutions on both sides in conducting RMB financing,” he said. “We may further explore multiple formats of market-based investment and financing to provide the financial lifeblood necessary for our co-operation.”
    Li added that China will promote RMB internationalisation by expanding bilateral currency swaps and local currency settlement with CEE countries.


Hubs:


  • Two subsidiaries of HKEX – the Stock Exchange of Hong Kong Limited (SEHK) and the Hong Kong Futures Exchange Limited (HKFE) – have opened their first overseas office in Singapore, the bourse said in a November 29 press release.
    The office will serve SEHK and HKFE’s clients in Singapore and Southeast Asia, and help connect international investors with Chinese capital markets, the firm said in a statement.
  • RMB deposits in Hong Kong increased by 0.9% to Rmb540.3bn ($81.8bn) in October, according to figures released by HKMA on Thursday. This marked the third consecutive month of growth for RMB deposits in the city, CEIC data shows. Meanwhile, cross-border RMB trade settlement in Hong Kong stood at Rmb314.5bn at the end of October, down from Rmb327.9bn in September.
  • The Hong Kong Monetary Authority (HKMA) has renewed its Rmb400bn currency swap agreement with the PBoC, the city’s central bank said in a November 27 statement. The renewed agreement will last for three years.


Payments:

  • Due to the Golden Week holiday, the renminbi fell two places to the seventh most used payments currency in October, according to Swift’s RMB tracker. With a market share of 1.46%, the Chinese currency is now behind the Swiss franc and Canadian dollar, which have market shares of 1.63% and 1.60%, respectively. The value in RMB payments decreased by 19.10% month-on-month, while the average value among all payments currencies went up by 3.02% in the same period, Swift said.

Quotas:


  • Regulators gave out $2.3bn of qualified foreign institutional investor (QFII) quotas in November, according to the State Administration of Foreign Exchange. The quotas were allocated to two South Korean institutions, the Bank of Korea and KB Asset Management, which received $2.1bn and $200m of quotas, respectively.
  • Meanwhile, three institutions received renminbi QFII (RQFII) quotas for the first time in November. Hong Kong-based Caitong International Asset Management and Rongtong Global Investment took Rmb3.5bn and Rmb2bn, respectively, while US-based BlackRock Institutional Trust Company secured Rmb4bn of quotas.
    China International Capital Corporation (Hong Kong) – which obtained its first batch of RQFII quotas in 2012 according to GlobalRMB data – got Rmb5bn of new quotas in November.
    Following the latest batch of quotas, the RQFII scheme reached a total size of Rmb604.9bn.



  • By Noah Sin
  • 01 Dec 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