Asia Pacific

China's Ministry of Finance (MoF) brought its seventh auction of offshore renminbi bonds on Wednesday, selling Rmb16bn ($2.6bn) in what was the first of two sales scheduled for this year. More than half the Rmb41.8bn demand was targeted at the three year tranche, continuing the short-end dominance of previous auctions. Fears of global rate rises make that unsurprising, but it was the central bank tranche that gave the most striking example of how strongly those concerns are driving markets.

The return of China’s A-share IPO market is taking shape after the China Securities Regulatory Commission (CSRC) said on Monday that around 100 companies would be allowed to conduct their IPOs from June until the end of the year.

Sovereign bond market volatility continued to buffet markets on Thursday and, after the slew of FIG issuance in the last week, there was a degree of supply indigestion. But covered bond bankers did not think there was much to be read into the lacklustre execution of this week’s German and Australian deals. The two issues were solid trades, but for idiosyncratic reasons lacked the sparkle of earlier deals.

The short end of the curve again dominated Wednesday's Rmb16bn auction of offshore renminbi bonds from China's Ministry of Finance (MoF), with more than half the total Rmb41.8bn demand coming into the three year tranche. That much was expected, given global fears of rising interest rates, but it was the central bank allocation that gave an intriguing insight into just how strongly those concerns are driving markets.

Longfor Properties has announced guidance on its inaugural CNH offering.

National Australia Bank opened books on Wednesday for its first euro benchmark of the year, deciding to follow the well-worn route of others with a seven year tenor, the eighteenth such maturity this year and the fifth this month. Though NAB took advantage of being alone in the market, underlying credit sentiment remains jittery.

China's Ministry of Finance (MoF) will hold its seventh auction of offshore renminbi government bonds on Wednesday, May 21, selling Rmb16bn ($2.6bn), including a Rmb2bn tranche reserved for central banks. Analysts expect yields on all tranches to show a distinct steepening from previous auctions, with the exception of the shortest dated tranche, a three year.

Bank of Toyko Mitsubishi UFJ (China) priced the first CNH issue from a non-leasing subsidiary of a Japanese financial institution on Monday. Rarity drove investors to the bond and while the issuer paid up over its dollar curve, it will use the proceeds onshore and does not intent to swap back.

China Construction Bank (CCB) Frankfurt Branch’s landmark offshore renminbi bond on Monday was met with strong demand in a market that has been buzzing with activity. Bankers said the success of the deal, which is the first CNH bond from a subsidiary of a Chinese name to settle, clear and list in Frankfurt, sets the stage for the city to become a popular destination for offshore RMB issues.

China Construction Bank (CCB) Frankfurt branch launched the first Frankfurt-issued renminbi-denominated bond from a subsidiary of a Chinese name on Monday morning. The two year transaction, which will clear and be listed in Frankfurt, had attracted more than Rmb1bn ($162m) in orders less than half an hour after books were opened.

Bank of Tokyo-Mitsubishi UFJ (China) launched its debut offshore renminbi bond on Monday. As the first CNH issue from a non-leasing subsidiary of a Japanese financial institution, the deal attracted a strong following just a few hours after launching.

Shanghai Pudong Development Bank made its debut in international bond markets on Thursday with an Rmb1bn ($162m) bond. With strong anchor orders building a solid foundation and good orderbook momentum, dealers were able to tighten pricing by 27bp.