Hengfeng Bank will sell 100bn shares at Rmb1 ($0.14) per share, with Central Huijin Investment, the Chinese sovereign wealth fund’s investment arm, to take up 60bn shares. Government-backed Shangdong Financial Asset Management will purchase 36bn shares. Singapore’s United Overseas Bank, which already holds a minority stake in Hengfeng, and other undisclosed buyers will take up the remaining 4% of the shares, according to a statement from Hengfeng Bank on Wednesday.
The detailed restructuring plan came four months after the bank was said to be put on a lifeline by government-backed sponsors.
It’s not the only Chinese firm getting a helping hand from government bodies. A Chengdu government-backed investment entity, Chengdu Xincheng Investment Group, is taking more than 35% of the stake in Chengdu Rural Commercial Bank, local media reported. The seller is Anbang Insurance Group, whose chairman, Wu Xiaohui, was jailed in 2017 for alleged fraud and embezzlement. The group was taken over by the Chinese insurance regulator last February.
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In November, the renminbi stepped up one position to become the fifth most active currency for international payments by value, with a share of 1.93%, according to Swift’s monthly RMB tracker. In October, the Chinese currency had a 1.65% share.
The renminbi ranks behind the Japanese yen, which took up 3.49% in November, and above the Canadian dollar at 1.73%.
In terms of international payments, excluding payments within the Eurozone, the renminbi retained its eighth position with a share of 1.24% in November, 0.18 percentage point up from October.
The numbers are revealed when Standard Chartered’s Renminbi Globalisation Index (RGI) – the bank’s measure of international renminbi usage – dropped slightly to 1,974 in October from 1,980 in September.
“This 0.3% month-on-month drop is only a modest setback, considering still-strong macro headwinds stemming from a slowing China economy and heightened US-China trade tensions then,” the bank wrote in a Tuesday note.
Foreign holdings of onshore assets, a component of the RGI, rose for a 10th consecutive month, the bank noted. Foreign investors’ onshore bond holdings also rose 3.3% in November from October, said the note.
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Sumitomo Mitsui Financial Group’s securities brokerage affiliate, SMBC Nikko Securities, has announced plans to set up a wholly-owned unit in China, Reuters reported on Monday, citing Yoshihiko Shimizu, the chief executive officer of the affiliate.
Shimizu added that the securities house would not consider partnering with a Chinese domestic firm.
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French insurance firm Axa has completed the acquisition of another 50% stake in its Chinese subsidiary, Axa Tianping Property & Casualty Insurance, for Rmb4.6bn, according to local media reports. The French insurance firm now owns 100% of its Chinese unit.
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In November, the Chinese domestic bond market saw Rmb3.9tr of new issuance, according to a monthly report by the People’s Bank of China.
Among those, central government bonds took up Rmb402.2bn, local government bonds Rmb45.8bn, financial bonds Rmb600bn, credit bonds Rmb908.4bn, asset-backed securities Rmb166.5bn and negotiable certificates of deposit Rmb1.8tr.