The week in renminbi: Amex gets green light onshore, traders can use existing accounts for London Connect, SGX sees surging A50 futures trading

In this round up, American Express (Amex) becomes the first global credit card firm to receive an onshore RMB settlement licence, Chinese traders using the new London-Shanghai Stock Connect are not required to open new accounts, and the Singapore Exchange (SGX) sees a 91% annual growth in its China stock index futures.

  • By Paolo Danese
  • 12 Nov 2018
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Amex became the first international credit card company to be granted permission to clear and settle renminbi transactions onshore, the firm said in a press release on November 9. Amex will use a domestic joint venture with LianLian, a local fintech company, to operate in China.

The People’s Bank of China (PBoC) said the joint venture, Express Hangzhou Technology Service Co, will have a preparatory phase of up to a year. The move is part of the wider opening up of China's financial sector, said the central bank in a November 11 press release.

"In the future, the [PBoC] will continue to take law-based and well-sequenced steps to advance the market entry approval of bank card clearing institutions in line with the principles of openness, fairness and justice,” the central bank added.

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Outbound trading by Chinese investors on the upcoming London-Shanghai Stock Connect will not require them to open a new securities account, China Securities Depository and Clearing (CSDC) said in a document released on November 8. CSDC added that trading of the Chinese depositary receipts listed in Shanghai under the scheme would settle in renminbi.

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In its monthly report, SGX said 9.4m contracts of its FTSE China A50 Index futures were traded in October, up 23% from September and up 91% year-on-year. Meanwhile, the SGX USDCNH futures managed a volume of 443,308, down 6% on a monthly basis but up 113% on a year earlier.

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Argentina is finalising an agreement with China to increase the size of its bilateral currency swap line from Rmb70bn to Rmb130bn, according to a November 9 media report. The deal will give Argentina access to more liquidity as the country struggles with sovereign debt and the terms of an agreement with the International Monetary Fund. China and Argentina first entered a three year swap line agreement in 2009.

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The People's Bank of China outlined more measures to support the private sector at the end of last week, including plans for special financial instruments as guarantees on private firms' bond issuance, according to officials quoted in a state media report published on November 10. Other measures will include supporting equity financing and further promoting bond issuance by the private sector.

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The Shenzhen Stock Exchange terminated the listing of a company because its share value fell below Rmb1, the first time a delisting occurred as a result of the rules for the face value of stocks, the exchange said in an announcement on November 9.

Zhonghong Holdings’ stock first traded under Rmb1 on August 15. From September 13 onwards, the stock traded under that value for 20 consecutive days, at which point the exchange rules for delisting were triggered.

The exchange, during its review of the stock ahead of delisting, found the company had committed a number of breaches to its code and failed to disclose administrative penalties in its annual report.

The company’s stock will be transferred to the National Equities Exchange and Quotations platform for 45 days before being entirely delisted, SZSE said.

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HSBC and BNP Paribas, through their Singapore operations, completed the first fully digitised end-to-end letter of credit (LC) transaction between two companies, Cargill and Rio Tinto, according to a press release from HSBC on November 9.

The digitised transaction involved Rio Tinto selling a shipment of iron ore from Australia to China for its customer Cargill, the bank said. BNP Paribas issued an LC over the blockchain on behalf of Cargill to HSBC Singapore acting on behalf of Rio Tinto. The technology allowed the transaction to be completed in less than two hours, compared to the typical one or two days for a paper-based LC.

  • By Paolo Danese
  • 12 Nov 2018

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 China Merchants Securities Co 15.31
2 Industrial and Commercial Bank of China (ICBC) 12.35
3 CITIC Securities 8.92
4 Agricultural Bank of China (ABC) 7.60
5 China CITIC Bank Corp 6.76

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 06-Dec-18 China Gas Holdings China 1,300
2 27-Nov-18 Daimler Germany 4,000
3 26-Nov-18 Beijing Enterprises Clean Energy China 2,800
4 15-Nov-18 Sun Hung Kai Properties Hong Kong 1,200
5 12-Nov-18 Global Logistic Properties via Iowa China Offshore Holdings Hong Kong 1,500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 30.97
2 HSBC 18.82
3 Societe Generale 3.85
4 Bank of China (BOC) 3.68
5 Bank of Taiwan 3.30

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 03-Dec-18 Huzhou Communications Investment Group China 500
2 22-Nov-18 Bank of China Tokyo Branch (BOC Tokyo) China 800
3 15-Nov-18 RusHydro Russian Federation 1,500
4 13-Nov-18 Bank of China (Hong Kong) (BOCHK) China 1,000
5 19-Sep-18 Agricultural Development Bank of China (ADBC) China 1,200