China market round-up: S&P issues first domestic rating, Italian Panda on the way, Bond Connect busier

In this round-up, S&P Global’s wholly-owned China unit gave its first onshore rating to ICBC Leasing, Italy will strengthen ties with the Mainland through a Panda bond and Bond Connect volumes rise.

  • By Rebecca Feng
  • 12 Jul 2019
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S&P Global (China), a wholly-owned subsidiary of the US-based credit rating firm, issued its first domestic rating to a Chinese debt issuer on Thursday, according to a press release by the company.

S&P became the first, and the only global rating agency so far, to win a licence to operate onshore in January. It gave a AAA rating to a unit of Industrial and Commercial Bank of China, ICBC Leasing, for its domestic renminbi-denominated debt. ICBC Leasing is rated A by S&P Global, the parent company.


An Italian Panda bond may be finally coming, according to a joint statement issued by the two countries after the first Italy-China Finance Dialogue on Thursday.

Both sides agreed to strengthen collaboration in the financial industry and encourage qualified financial institutions to enter each other’s securities, insurance, wealth management and futures markets.


China’s June consumer price index (CPI) inflation reached 2.7% year-on-year, but producer price index (PPI) inflation eased by 0.6 percentage points, dropping to zero, according to data released by the National Bureau of Statistics.

CPI inflation was led by food prices, especially pork and fresh fruits. Non-food inflation moderated to 1.4% year-on-year in June from 1.6% in May.

“These are signs that demand, particularly in the manufacturing sector, is weak, and that bolder and more sustained policy easing and faster reforms are needed,” Julia Wang, senior economist for Greater China at HSBC, wrote in a Wednesday note.

Zhennan Li, a China economist at Goldman Sachs, added in a Wednesday note: “Overall, headline CPI inflation is likely to remain high in the coming months. But given the still material downside risks for growth, we believe monetary policy will stay accommodative and the repo rate should stay relatively low in the coming months.”


China’s foreign investment in the first half of the year grew 7.2% to Rmb478.3bn ($69.6bn), the Ministry of Commerce said in a press conference on Thursday.

Most of the foreign direct investments (FDI) went into high-tech industries including pharmaceutical, electronic and communication equipment manufacturing.

Investment in new FDI projects were worth Rmb109.3bn in June, an 8.5% year-on-year increase.

Investments from Hong Kong, Korea, Singapore and Germany increased by 4.8%, 63.8%, 10.5%, and 81.3% respectively.


Tradeweb saw an average daily trading volume in Chinese bonds through Bond Connect reaching a record high of $1.1bn in June, a 406% increase since the connect scheme launched in July 2017, according to the trading platform’s monthly activity report.

In other news, Standard Chartered’s Renminbi Globalisation Index, a measure of international usage of the renminbi, increased by 2.7% month-on-month in May, the fastest growth since August 2018, according to a research note on Thursday.

In addition, the share of renminbi-settled goods trade rose to 14.6% in May from an average of 13.8% in the first four months of the year, reaching Rmb378bn. This was the highest level since January 2016, according to the report. Foreign holdings of Chinese onshore bonds also increased by Rmb18.4bn in May and June combined.

  • By Rebecca Feng
  • 12 Jul 2019

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 23.56
2 Industrial and Commercial Bank of China (ICBC) 16.09
3 China Merchants Securities Co 11.38
4 Agricultural Bank of China (ABC) 6.90
5 HSBC 5.75

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 03-Sep-19 China Power International Development China 2,000
2 02-Sep-19 China Power International Development China 500
3 22-Aug-19 Mengniu Dairy China 1,000
4 07-Aug-19 Daimler Germany 5,000
5 31-Jul-19 Cassa Depositi e Prestiti SpA Italy 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