Asia Pacific

The Association of the Luxembourg Fund Industry (ALFI) and the Asset Management Association of China (AMAC) on July 2 signed a memorandum of understanding (MoU) focusing on developing activities to create mutually beneficial opportunities for the fund industries in both countries.

The latest reduction in from 190 to 139 restricted investment areas in the Shanghai pilot Free Trade Zone (FTZ), from 190 to 139, opens up opportunities in real estate, entertainment, and healthcare. But critics say the list is still too far-reaching.

Renminbi internationalisation in Europe took another step forward on Sunday when the People’s Bank of China (PBoC) signed memoranda of understanding (MoUs) for RMB clearing arrangements with the central banks of Luxembourg and France, paving the way for official RMB clearing banks to be appointed for each country.

The central bank governors of France and China on Sunday signed a memorandum of understanding (MoU) that will lead to the appointment of an RMB clearing bank in Paris. Switzerland, meanwhile, is laying the groundwork for its own swap line.

In this round-up, the RMB is now the second most used currency for China-Hong Kong cross border payments, StanChart issues Taiwan RMB predictions, JP Morgan launches a new RMB-hedged share class for a bond fund, and Australia hopes for its own RMB clearing bank soon.

The London Stock Exchange (LSE) is looking at ways to expand its RMB offering, having established itself as a destination for offshore dim sum bond listings and RQFII Exchange Traded Funds (ETFs).

Reforms that China is implementing in the Shanghai Free Trade Zone (FTZ) are beginning to trickle out elsewhere. From Friday June 27, the People’s Bank of China (PBoC) is liberalising the deposit rate on foreign currency in Shanghai.

International Finance Corporation (IFC) is quickly establishing itself as an innovator among foreign issuers in the Chinese currency, having bagged two successful bonds since the start of the year. The most recent — a three year Rmb500m ($80m) green bond listed in London — was a first in the market. In an interview with GlobalRMB, Monish Mahurkar, director of treasury client solutions, pledges more innovation.

Beijing Infrastructure Investment (Hong Kong) priced its debut offshore renminbi bond last Friday. The issuer took an exhaustive approach to preparing the deal and was rewarded with tight pricing.

China City Construction (International) made its debut in international markets on Wednesday. Despite drawing a well subscribed order book for the Rmb2.5bn ($405m) issue, the state owned borrower wanted to leave some money on the table to ensure good secondary performance.

Hang Seng Bank (China) issued its inaugural bond in international markets on Wednesday, printing a Rmb1bn ($162m) three year. Fueled by rarity value and the issuer’s solid reputation, pricing for the trade landed well inside of a quasi sovereign comparable.

UK Export Finance is planning to boost British exports to China through a long term RMB loan-backing initiative. HSBC is the first partner on the scheme.