Asia Pacific

Chinese authorities are setting up a platform that will allow foreign issuers to access the country's domestic capital markets in the Shanghai free trade zone (FTZ), in what could be a reboot of the panda bond market that was created in 2005. Details are scarce, but the proposal would fit in with the overarching plan for Shanghai to become an international financial hub on a par with Hong Kong by 2020.

The Formosa bond market has had an exciting start to the year. International issuers — some returning, others debuting — have been flocking to Taiwan's renminbi market to show their determination to do RMB business at a time when Hong Kong's traditionally dominant dim sum market only saw two public deals in January. But observers should beware of getting over-excited. Formosas may have some appeal right now, but there is a long way to go.

Deutsche Bank is preparing to price its second Formosa bond imminently, several sources close to the deal have said to GlobalRMB. The upcoming deal, which will be a three year bond, will be the bank’s second publicly syndicated renminbi-denominated bond.

There were finally some signs of life in the offshore renminbi (dim sum) bond market this week, with a pair of Chinese names mandating banks for new deals.

In this round-up, Bank of China’s CRI index hits a new high, RMB deposits break past Rmb1tr ($160bn), preparations for a Shenzhen stock link are in their final stages, and Gansu Province has applied to central authorities for permission to set up a free trade zone.

China is considering overhauling regulation of foreign investment into the country. It could tighten the screws on foreign ownership of its booming technology sector and steer more Chinese firms toward dual class shareholdings, if it approves a draft law that addresses the use of the variable interest entity (VIE), writes John Loh.

On Wednesday the People's Bank of China (PBoC) cut its reserve requirement ratio (RRR) by 50bp in a move that the market had not expected to happen until after the Chinese New Year holiday. The shift triggered a flurry of receiving in short-end swaps on Thursday morning and short-end outperformance drove some disinversion momentum across the curve, writes Deirdre Yeung of Total Derivatives.

Maybank, Malaysia's largest bank by assets, is preparing its debut renminbi bond offering to be launched within the month, multiple sources close to the deal have told GlobalRMB. The bank will be the first southeast Asia issuer in Taiwan’s Formosa bond market.

The market is getting ready for the wider adoption of offshore RMB bonds as collateral in securities transactions, solving a longstanding liquidity issue, according to Euroclear. Meanwhile, on the onshore China front, a Bond Connect initiative is likely and will open up a new world for foreign investors, the organisation says.

Standard Chartered has wrapped up the first cross-border loan from a foreign bank to a client based in the Tianjin Eco-City (TEC). Although small, the Rmb50m ($8m) financing for Tianjin Eco-City Keppel New Energy Development (TEC-Keppel) is nonetheless a landmark, originating from StanChart's Singapore branch.

Singapore and London are working more closely together to consolidate their lead as RMB hubs outside Greater China in areas such as trading, deposits and quotas to invest in the onshore Chinese market. In the wake of the most recent initiative — a Singapore-London RMB Forum that took place last week in the Asian city-state — participants hailed 2015 as a year that would see robust growth in the offshore RMB market.

Export Import Bank of Korea (Kexim) returned to the Formosa bond market with a dual tranche offering this week, about a year after its debut in Taiwan. On Monday Kexim priced a Rmb300m ($48m) five year tranche at 4.05% and a Rmb500m seven year tranche at 4.20%, two sources told GlobalRMB.