China people & markets round-up: BOC, CFETS launch bond index, IIF sees strong inflows into China, Trump said to have approved tariffs
GlobalCapital, is part of the Delinian Group, DELINIAN (GLOBALCAPITAL) LIMITED, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 15236213
Copyright © DELINIAN (GLOBALCAPITAL) LIMITED and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Asia

China people & markets round-up: BOC, CFETS launch bond index, IIF sees strong inflows into China, Trump said to have approved tariffs

donald_trump_pa_230x150

New benchmark created for interbank bonds, the Institute of International Finance (IIF) projects further inflows into China’s capital markets, and the White House is reportedly going ahead with plans to place tariffs on $50bn of Chinese imports.

  • Bank of China and the China Foreign Exchange Trading System (CFETS) launched the first bond index in the interbank market this week, the bank said in a June 14 press release .

    Th e bond index has four sub-indices, covering Treasuries, policy bank bonds, bonds and negotiable certificates of deposit (NCDs) with high credit ratings, respectively, according to CFETS’ website.

    The index takes into account various characteristics of interbank bonds, such as trading volume and the number of market makers involved, and pick the most actively traded bonds as samples, said BOC. The bank added that the index is a practical benchmark for both onshore and offshore investors.

  • China is attracting capital inflows as other emerging markets struggle to do so, Emre Tiftik deputy director and Enjie Guan, policy advisor at the IIF, said in a June 7 report.

    “Effective capital flows management, still-robust growth momentum, and improved investor appetite against the backdrop of both declining corporate sector indebtedness and declining shadow banking activity have all been supportive for flows to China,” they said .

    Tifti k and Guan estimate that China had $21bn of net capital inflows in April, bringing the total inflows so far this year to over $53bn, compared with over $32bn of outflows at this point last year. Meanwhile, net purchase of bonds and equities in global emerging markets amounted to $46bn as of May, down from $134bn as of May 2017, according to the IIF report.

    The IIF also said measures to further open up the onshore bond and equity markets would sustain the momentum for further inflows into China later this year.

  • US president Donald Trump has reportedly given the green light for placing 25% tariffs on $50bn Chinese imports, media reports claimed this morning.

    Trump unveiled his tariff plans on May 29, stating the move is in retaliation against Chinese companies allegedly stealing US intellectual property. The president said that the final list of goods to be hit by the tariffs would be finalised on June 15 and implemented shortly

    The US government has not confirmed the reports. Sarah Sanders, press secretary at the White House, sidestepped questions on possible implementation of the tariffs in a June 14 press briefing.

    “Yes, there is a trade meeting today,” she said. “In terms of any announcements, I’ll keep you posted when we have something to announce.”

  • Kazakhstan is hoping to launch a RMB clearing and settlement centre in Astana, Kairat Kelimbetov, governor at the Astana International Financial Centre (AIFC), told Chinese state media this week.

    AIFC is working with the Shanghai Stock Exchange to finalise the plan, which is pending the approval of regulators, he added.

    "China is internationalising the RMB and we hope the AIFC can be a pilot to promote RMB settlement, especially in natural resources sectors," he said .

    Chin a Development Bank (CDB) has opened an office in the city, and BOC is currently doing its due diligence for setting up an office there, said Kelimbetov. He noted that other big Chinese banks, such as Agricultural Bank of China, Bank of Communications and Industrial and Commercial Bank of China, could join BOC and CDB in Astana. However, banks are not the only Chinese businesses Kelimbetov is inserted in.

    “We also welcome internet companies such as Alibaba, Tencent, Baidu and fintech startups," he said.

  • Hong Kong pulled out the big guns in the hope of bringing Saudi Aramco’s IPO home, Carrie Lam, the Special Administrative Region’s chief executive, hinted in a June 13 speech at the Hong Kong Stock Exchange.

    “I already put in my little part by going on a 12-hour trip to Saudi Arabia last December, Riyadh, for only one single objective — you know what that is — and we're still working very hard at that,” she said. “I'm happy to go on more roadshows, if my diary permits.”

  • The National Development and Reform Commission is setting up a unit to support Hong Kong’s participation in the Belt and Road Initiative, according to a June 13 statement by the policy body.

    The decision followed a meeting between the NDRC, Chinese officials in charge of Hong Kong and Macau affairs, and officials from the Hong Kong government on Tuesday. Representatives from the China Banking and Insurance Commission, Ministry of Commerce and the People’s Bank of China joined the meeting.

  • Patrick Njoroge, the governor of the Central Bank of Kenya, said the central bank is considering adding RMB to its FX reserves, according to a June 12 report by Xinhua.

    “It is inevitable that Kenya will include the Chinese RMB as a reserve currency,” Njoroge told the Guangzhou-Foshan Nairobi Business forum. “The only question is when and the timing will be determined by a number of short term factors.”

    Adding RMB to the reserves will help lower the cost of bilateral trades between the two countries, the volume of which had grown in the past decade, Njoroge noted.


Gift this article