The week in renminbi: London-Shanghai Connect to go ahead, China remains largest holder of US Treasuries, BOC sets up Qatar branch

UK and Chinese officials press ahead with London-Shanghai Stock Connect, China tops the October league table of foreign holders of US Treasuries, and Bank of China opens a new branch in Qatar.

  • By Noah Sin
  • 18 Dec 2017
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Equities:

  • China and the UK will accelerate the process of launching the London-Shanghai Stock Connect, according to a December 16 joint statement. The statement, which outlined the policy outcomes of the ninth UK-China Economic and Financial Dialogue (EFD), also confirmed the Connect will link the two equity markets using depository receipts, as GlobalRMBpreviously reported.
    The EFD, which took place in Beijing on December 15 and 16, was co-chaired by Ma Kai, vice-premier of China, and Phillip Hammond, chancellor of the exchequer of the UK.

Bonds:

  • The statement noted that China will grant more UK banks the licence to underwrite Panda bonds in the interbank bond market, after HSBC obtained the licence in October, and will encourage UK companies to sell Panda bonds in the onshore market.
    The UK and China also confirmed that they will look into launching a Connect channel to link their two bond markets. They will set up a working group and conduct a feasibility study on the project.
  • China remained the largest holder of US Treasury bonds in October, according to data released by the US Department of the Treasury. China held $1.1892tr in the month, up from $1.1808tr in September. China was followed by Japan and Ireland, which held $1.0939tr and $312.4bn of US Treasuries in October, respectively.

Hubs:

  • Bank of China opened a new branch in Qatar on December 13, the bank said in a press statement. The branch will provide services ranging from corporate deposit and loans, foreign exchange, international settlement to trade finance, and contribute to facilitating trade between China and Qatar.

Belt and Road:

  • China and the UK have agreed to set up a $1bn joint investment fund to support the Belt and Road Initiative. The fund will invest in innovative, sustainable and consumption-driven opportunities, according to the joint December 16 statement.
  • Meanwhile, the UK will contribute $50m to Asian Infrastructure Investment Bank (AIIB)’s Project Preparation Special Fund, the development bank said in a December 16 release. The contribution will target the poorer member countries of the AIIB, said president Jin Liqun.
    “These additional resources will help our low-income member countries to prepare projects that will meet AIIB’s standards,” he said. “This will result in more projects that are financially viable, environmentally sustainable and welcomed by local communities.”

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  • By Noah Sin
  • 18 Dec 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 China Merchants Securities Co 20.87
2 Industrial and Commercial Bank of China (ICBC) 14.74
3 CITIC Securities 12.47
4 Agricultural Bank of China (ABC) 11.34
5 China CITIC Bank Corp 10.21

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 19-Jul-18 Beijing Enterprises Water Group China 3,000
2 13-Jul-18 Global Logistic Properties Singapore 2,000
3 13-Jul-18 Hang Lung Properties Hong Kong 1,000
4 28-Jun-18 China Water Affairs Group China 200
5 26-Jun-18 Want Want China Holdings Taiwan 500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 33.47
2 HSBC 19.33
3 Societe Generale 4.75
4 Bank of Taiwan 4.07
4 Cathay United Bank 4.07

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 21-Jun-18 Shimao Property Holdings China 1,200
2 19-Jun-18 Korea Development Bank (KDB) South Korea 1,750
3 07-Jun-18 Export-Import Bank of Korea (Kexim) South Korea 1,500
4 23-May-18 QNB Finance Qatar 600
5 16-May-18 First Abu Dhabi Bank PJSC United Arab Emirates 1,100