Asia Pacific

Market participants have welcomed reported indications by Yi Gang of the People's Bank of China (PBoC) that China’s Cross-border Inter-bank Payment System (CIPS) is set to be launched this year. They see it as a key step to facilitating RMB usage in global payments and making RMB clearing more market-driven.

Average CNH bond yields have risen almost 60bp over the last three months and the renminbi has depreciated against the dollar by 2% over the same period. But HSBC analysts say in their latest report tracking the market that a meaningful recovery in dim sum bonds will only happen once the currency has finally hit its short term trough.

Gazprombank, the third largest bank in Russia by assets, is considering issuing a Panda bond, GlobalRMB understands. It would be the first ever Panda bond from a financial institution if it were to emerge, but continuing sanctions against Russia could cause difficulties.

China's National People’s Congress (NPC) meeting finished on Friday, at the end of a week that saw premier Li Keqiang scale back GDP growth targets, annonunce a plan to trial a Shenzhen Stock Connect link and expand the use of free trade zones.

In this round-up, Singapore RMB deposits reach a new record while Hong Kong RMB deposits are slightly down in January, Suriname is to launch RMB trade settlement, Bank of Korea gives tax incentives to won-RMB direct trading, and ICBC launches RMB settlement for commodities.

Chinese authorities are planning to compete with a new London gold fix with an RMB-denominated benchmark, as precious metals traders warm up to using the currency.

BNP Paribas and Commonwealth Bank of Australia (CBA) became the third and fourth non-Chinese banks to issue Basel III compliant tier two debt in the offshore renminbi market this week.

Commonwealth Bank of Australia (CBA) became the fourth non-Chinese bank to issue a Basel III tier two bond in the offshore renminbi (CNH) market. Although it wasn't able to tighten guidance, the Australian bank took advantage of favourable renminbi-dollar swap rates and managed to save cost.

There is no sign that the Formosa bond bandwagon is taking a break, with Macquarie pricing its debut renminbi-denominated bond in Taiwan, and Hana Bank adding another Korean name to the list of international issuers in the market. Macquarie’s deal also marked the first Australian issuer of a Formosa bond.

BNP Paribas has become the third non-Chinese bank to issue a Basel III bond in the offshore renminbi (CNH) market. On the back of a big order book from high quality investors, not only was it able to increase the size but the new trade also came inside its dollar and euro tier two curves.

There are signs that the pace of RQFII quota approvals is picking up, even though the volume of quotas handed out is still lagging the pace seen until the fourth quarter of 2014. A tax bill of as much as $4bn could also spoil the RQFII party, but the Stock Connect could be set for a boost as European Ucits funds get the green light to participate.

As the first Thai bank enters the offshore RMB bond market, Thai regulators are keen to attract Chinese corporates to its capital markets.