China market round-up: CPI picks up, MUFG gets primary dealership, Philippines, Egypt plan Pandas

In this round-up, consumer and producer prices rise, sovereigns line up for Pandas and MUFG gets primary dealer role.

  • By Addison Gong, Rebecca Feng
  • 12 Apr 2019
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China’s consumer price index (CPI) in March rose 2.3% year-on-year, from 1.5% in February, while producer price inflation rebounded to 0.4% YoY from a 0.1% gain in February, according to data released by the National Bureau of Statistics on Thursday.

The CPI inflation came in line with economists' forecasts, and was largely driven by food prices — which jumped by 4.1% — in particular pork prices. PPI inflation data was also largely in line with estimates, being attributed to an increase in oil prices.

The acceleration in both consumer and producer prices last month is the latest sign that China’s economy may be stabilising after a recent slowdown, according to a Thursday note by the US-China Business Council. 

Economists at Goldman Sachs expect pork prices to rise further due to a decline in the breeding stock since last April, as well as the impact of African swine fever, which could put upward pressure on headline CPI not only in April but the coming months.

Nomura expects annual CPI inflation to rise to 2.5% in 2019 from 2.1% in 2018, with the potential for certain monthly CPI inflation to increase to around 3% YoY.


China also released trade data for the first quarter of 2019 on Friday. March exports came at Rmb1.34tr ($199.5bn), 21.3% higher than a year ago and ahead of expectations, but imports dropped by 1.9% to Rmb1.12tr, according to data from the General Administration of Customs.

The total import-export figure of Rmb2.46tr last month helped push first quarter trade volumes up by 3.7% YoY to Rmb7.01tr. The annual increase in exports was 6.7% for the first three months of 2019. Imports rose by 0.3%.

In US dollar terms, China also reported a trade surplus of $76.31bn for the past quarter, or a whopping 70.6% compared to the first quarter of 2018.

The numbers came after the International Monetary Fund lifted the 2019 economic growth forecast for China on Tuesday to 6.3% from the previously projected 6.2%.


The upcoming onshore renminbi bond issuance from the Republic of the Philippines is likely to have a much bigger size than last year’s Rmb1.46bn, its inaugural appearance in the currency. Reuters reported that the southeast Asian sovereign is planning to issue Rmb6bn ($893m) of Panda bonds, and the first Rmb3.5bn tranche is expected to be marketed with a coupon range of 3.3%-3.9%, with Bank of China as the lead underwriter and bookrunner.


Egypt is looking at the renminbi as one of the currencies for sovereign bond issuance in the next fiscal year, which starts in July. Finance minister Mohamed Maait told Bloomberg in an interview in Washington that the country plans to debut not only in Panda bonds, but also Samurai, sukuk and green bonds as a way of diversification. Egypt has sold bonds in US dollars and euros so far this year.


MUFG has become the first Japanese bank to have been greenlighted to take part in China central bank’s open market operations, according to Japanese media. MUFG (China) has received a notice from the PBoC, and plans to make its debut as a primary dealer of the open market as early as this month. HSBC was the first foreign bank to gain primary dealership back in 2007.


The PBoC has suspended reverse repo in the open market for 17 consecutive trading days, as of Friday. The current liquidity in the banking system is at a level that is ‘reasonably ample’, the central bank said in an announcement on Friday morning.


The Ministry of Finance and the People’s Bank of China have expanded the period for individual investors to buy Chinese government bonds at bank counters from 10 days to the whole month of April

Individual investors can purchase CGBs through 40 underwriters through 1.3 billion branches. They can also purchase CGBs from 27 underwriting members with internet banking functions.


Bank of China has received the approval from banking and insurance regulator to raise Rmb100bn of preferred shares. The bank plans to use the proceeds to replenish its tier one capital.

  • By Addison Gong, Rebecca Feng
  • 12 Apr 2019

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 21.85
2 China Merchants Securities Co 14.67
3 Industrial and Commercial Bank of China (ICBC) 14.44
4 Agricultural Bank of China (ABC) 8.89
5 China Securities 7.41

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 10-Jul-19 BMW Finance N.V. Germany 3,500
2 20-Jun-19 Maybank Malaysia 2,000
3 30-May-19 Portugal Portugal 2,000
4 17-May-19 Trafigura The Netherlands 540
5 16-May-19 CITIC Pacific China 1,000

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 32.50
2 Credit Agricole 6.34
2 HSBC 6.34
4 Bank of China (Hong Kong) (BOCHK) 6.22
4 Bank of Communications Hong Kong Branch (BOCOM HK) 6.22

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 16-Jul-19 CIFI Holdings China 1,600
2 22-May-19 Agricultural Development Bank of China (ADBC) China 3,000
3 16-Apr-19 ICBC Singapore Branch China 1,000
4 10-Apr-19 Bank of China Macau Branch (BOC Macau) China 4,500
5 15-Mar-19 Bank of Communications Hong Kong Branch (BOCOM HK) China 2,500