The week in renminbi: CFETS kicks off Thai baht trading, top Chinese official assures Hong Kong of its RMBi role, CCB opens New Zealand branch

China launches onshore trading for Thai baht, NPC chairman says Hong Kong remains important to China’s effort to promote the renminbi, and China Construction Bank opens a new branch in Auckland.

  • By Noah Sin
  • 05 Feb 2018
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FX:

  • China Foreign Exchange Trade System (CFETS) began providing spot, forward and swap trading between the onshore renminbi (CNY) and the Thai baht in the interbank market on Monday, according to a February 2 announcement by CFETS.
    In an effort to promote the Belt and Road Initiative, CFETS is exempting commission fees for all CNYTHB trading until the end of July 2020. The addition of the currency pair to the interbank market will further promote bilateral trade and investment, and the usage of RMB in cross-bordersettlement, said CFETS.
    CFETS has named 13 banks as market makers for CNYTHB transactions, including the onshore branches of Bangkok Bank, HSBC, Kasikornbank, OCBC, Standard Chartered and UOB.
    The move came after CFETS said on January 5 that it will open up the CNY market for overseas banks based in Cambodia, Kazakhstan, Mongolia and Thailand.
  • The trade-weighted index by CFETS closed at 95.82 on January 31, up 1.02% in the month, with the BIS basket and special drawing rights basket at 96.75 and 96.94, up 0.85% and 0.99%, respectively.

Belt and Road:

  • Hong Kong remains crucial to China and its attempts to internationalise the RMB, Zhang Dejiang, the chairman of the Standing Committee of the National People’s Congress, said at a forum in Beijing on February 2.
    “Hong Kong remains the greatest source of foreign investment for China, and it is the first choice for China in piloting policies such as RMB internationalisation,” he said.
    Speaking at the same forum, Norman Chan, chief executive of the Hong Kong Monetary Authority, said RMB internationalisation is inseparable from the Belt and Road Initiative, arguing that Hong Kong could serve as the one-stop-shop for Chinese companies as they invest abroad, providing services such as settlement, bond issuance and IPOs, according to a February 3 local media report.

Derivatives:

  • The China Securities Regulatory Commission is preparing to open up iron ore futures trading to foreign investors on the Dalian Commodity Exchange, the regulator said in a February 2 announcement.

Hubs:

  • China Construction Bank has opened an overseas branch in Auckland, New Zealand, the bank said in a February statement.
    The new branch will provide funding for local infrastructure projects, financing for Chinese companies in New Zealand, and RMB settlement, trade finance and financial markets services, said CCB.
  • CCB also has a wholly-owned subsidiary in New Zealand, China Construction Bank (New Zealand), which was launched in July 2014.
  • The Singapore Exchange’s USDCNH futures hit a record in trading volume in January at 297,011 contracts, worth $29bn, the bourse said in a February 2 announcement. The growth marked a 175% year-on-year increase for the offshore renminbi product.
    Daily open interest for the contract also reached a new high on January 26, hitting 31,278 contracts or $3.21bn.

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  • By Noah Sin
  • 05 Feb 2018

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