The week in renminbi: CSRC kick-starts H-share convertibility pilot scheme, UBS crowned top foreign manager in China, Beijing and Washington consider trade talks

The Chinese securities watchdog names the first company to take part in the H-share convertibility experiment, Z-Ben Advisors says UBS is the best international asset manager in the onshore market, and the US and China may meet to resolve trade dispute.

  • By Noah Sin
  • 23 Apr 2018
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Equities:

  • The China Securities Regulatory Commission (CSRC) has picked Legend Holdings as the first company to pilot the H-share convertibility scheme, Gao Li, spokesperson at the CSRC, told an April 20 press conference.
    The move is an important step in opening up the Chinese capital markets, said Gao. She noted that it will strengthen the financial services sector’s ability to support the real economy, and help Hong Kong to better integrate with China’s development plan.
    The news came almost four months after the CSRC approved the programme. It will allow mainland-based major shareholders in H-share companies — Chinese companies listed in Hong Kong — to convert their holdings from non-traded stocks, and buy and sell them on the exchanges. These investors were previously barred from doing so.
  • Hong Kong Exchanges and Clearing and China’s National Equities Exchange and Quotation (NEEQ), an exchange for small and medium enterprises, signed a memorandum of understanding on Saturday, allowing companies to list on each other’s exchange without additional approval, according to an April 21 announcement by NEEQ.
    The move will allow Chinese companies listed on NEEQ to list in Hong Kong, without delisting in the mainland, according to a Q&A published by the NEEQ.

Investment:

  • UBS has built the best platform among foreign asset managers in China, independent consulting firm Z-Ben Advisors said in an April 23 report. The Swiss giant scored 67.3 points in the 2018 league table, nabbing the top spot from JP Morgan, which scored 63.2 points. They were followed by Schroders, Invesco and BlackRock, which scored 53.1, 52.8 and 49.3 points, respectively.
    The asset management landscape for foreign firms in China has become more competitive, said Ivan Shi, director of data analytics at Z-Ben. Whereas in previous years foreign firms could get to the top of the overall rankings by doing well in one of the three categories under consideration — onshore, outbound or inbound business — this year’s top dogs had to perform well across the board to stand out.
    Z-Ben compiled the rankings by giving the heaviest weighting to onshore activities, which includes business conducted through foreign firms’ wholly foreign-owned enterprises (WFOEs) and joint ventures, according to the report. Outbound business is considered the least important given China’s tight control of capital flows.

Trade:

  • Steven Mnuchin, US treasury secretary, has hinted that he may travel to China to ease the trade tensions between Washington and Beijing.
    “I am not going to make any comment on timing, nor do I have anything confirmed, but a trip is under consideration,” Mnuchin told media at the International Monetary Fund and World Bank conference on April 21.
    In an April 22 statement, the Chinese Ministry of Commerce confirmed it has received the message from the US to send Mnuchin to talks in China, and welcomed the planned trip.

Policy:

  • The idea of a Mnuchin mission was floated as Yi Gang, governor of the People’s Bank of China, told central bank governors and finance ministers in Washington during meetings held April 19 and April 20 that the country will continue to open up and reform despite uncertainties brought about by trade tensions.
    Yi also sounded upbeat when talking about the Chinese economy, pointing to strong growth in consumer spending, an improvement in corporate profitability and a strengthening renminbi. He added that the quality of China’s economic growth will continue to improve.

Payments:

  • Bank of China’s Karachi branch, Bank of New York Mellon’s Shanghai branch, China Citic Bank International, and Japan’s Nanto Bank, Hyakujushi Bank and the 77 Bank, have become indirect participants of the Cross-border Interbank Payment System (Cips), effective April 20, Cips said in an April 21 announcement.

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  • By Noah Sin
  • 23 Apr 2018

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 China Merchants Securities Co 18.01
2 Industrial and Commercial Bank of China (ICBC) 15.02
3 CITIC Securities 10.77
4 Agricultural Bank of China (ABC) 9.79
5 China CITIC Bank Corp 8.81

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 11-Oct-18 Global Logistic Properties via Iowa China Offshore Holdings Hong Kong 1,200
2 28-Sep-18 Trafigura Singapore 700
3 17-Sep-18 The Wharf (Holdings) Hong Kong 2,000
4 10-Sep-18 China Gas Holdings China 1,500
5 20-Aug-18 ABC International (parent: Agricultural Bank of China) China 3,000

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 33.31
2 HSBC 20.53
3 Societe Generale 4.21
4 Bank of Taiwan 3.60
4 Cathay United Bank 3.60

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 19-Sep-18 Agricultural Development Bank of China (ADBC) China 1,200
2 17-Sep-18 Hitachi Capital (UK) United Kingdom 600
3 13-Sep-18 CIFI Holdings China 1,000
4 05-Sep-18 Daimler Germany 1,000
5 03-Sep-18 First Abu Dhabi Bank PJSC United Arab Emirates 650