Asia Pacific

It has been six months since South Korea formally became an offshore renminbi hub, with its own official clearing bank. The last year has seen a massive increase in RMB deposits, tripling to about Rmb120bn ($19bn), but Yoo Jaehoon, chairman and CEO of Korea Securities Depository, the country's leading custody and settlement services provider, tells GlobalRMB that the key issue for RMB development in the country remains the expansion of its use in the real economy.

After the boom comes the bust. If 2014 was a banner year for offshore RMB bond issuance, things are not looking too hot for 2015. Just four deals have priced so far, with the volume raised just a quarter of last year. Dim sum bonds have been a key tool of RMB internationalisation, but changing conditions have stripped them of their appeal. It’s time for Chinese authorities to get creative.

In this round-up, free trade accounts launch in the Shanghai pilot Free Trade Zone (FTZ), authorities announce an imminent expansion of FTZ policies to the entire country, the Bahamas is making a push to become the second RMB hub in the Americas, and ICBC announces big growth in its RMB cross-border business.

Macquarie Securitization Limited celebrated Australia Day on Monday by launching a roadshow for what may be the first Australian RMBS to be priced in 2015, well over a month since the last supply from the country.

A long-stalled proposal to allow real estate investment trusts (Reits) in China re-emerged this week. The plan, slated for the first half of this year, is expected to help de-gear the balance sheets of Chinese homebuilders and tide them over a possible liquidity crunch. But as the plan has been on ice for a decade, questions abound as to its effectiveness — and whether it will find willing buyers and sellers, writes John Loh.

France’s Caisse d’Amortissement de la Dette Sociale sashayed into the offshore Renminbi market in style on Wednesday, becoming the first French public sector issuer to print CNH — and printing the biggest ever deal from a European agency.

A surge in RMB activity in Africa could be set to get under way soon. The Mauritius central bank recently argued that the country was ready to become Africa’s first RMB hub. Others, such as Kenya and South Africa, have already stepped up their involvement in RMB internationalisation over the past few years via FX reserves and the dim sum bond market. But so far, Chinese regulators have shied away from any official moves towards setting up clearing arrangements.

The renminbi became the fifth world payments currency in November 2014, according to new data just released by the Society for Worldwide Interbank Financial Telecommunication (Swift), overtaking the Canadian and Australian dollars.

Morgan Stanley is mulling issuing a debut Formosa bond in Taiwan, eyeing a five year transaction with a size of no more than Rmb1bn ($160m), two sources told GlobalRMB this week. If a deal emerges, it would be the first Formosa from a US issuer, and only the second from a non-Chinese or Taiwanese bank.

Cayman Ton Yi Industrial Holdings Limited (Cayman TY), a subsidiary of Taiwan headquartered Ton Yi Industrial Corp, has issued a small Formosa bond, several Taiwan DCM bankers have told GlobalRMB. The three year deal has been priced to yield 4.20% with a final size of Rmb142m ($22.6m), according to two of the sources.

The Shanghai pilot free trade zone (FTZ) initiative provoked an unhealthy mix of early-days chest-thumping by Chinese authorities and dismayed booing on the part of disappointed foreign observers in 2014. In December emotions surrounding the FTZ were finally beginning to quieten down, but then came the announcement of not one, but three new FTZs.

Caisse d'Amortissement de la Dette Sociale is set for a market first this week, after mandating banks on Monday for what will be the first offshore renminbi bond from a French public sector issuer.