Asia Pacific

Chinese state-owned banks have been eyeing the CNH bond market, keen to make their first issues of the year. Yet even as conditions improve, a 30-basis point premium will keep these banks out of the market.

Not content with pricing the first regulated Canadian covered bond in euros and the first regulated benchmark in US dollars, the Royal Bank of Canada is now marketing its first Australian dollar covered bond benchmark.

China's central bank has removed the lending floor for banks but kept the ceiling for deposit rates. Yet it should consider eliminating the latter as soon as possible if Shibor is to have any real credibility.

The HKMA looked to address offshore renminbi liquidity concerns by improving the provision of the currency, making it available to banks faster.

Asian currency bonds transaction from the last week

High yield companies with CNH refinancing needs will skirt the bond market in favour of US and Hong Kong dollars loans, hoping to find cheaper funding through swaps while dim sum opportunities remain sparse.

In this week’s round up of offshore renminbi news, ICBC clears Rmb60 billion in Singapore, Taiwan expands companies’ dim sum bond trading capabilities, and Australians show appetite for renminbi.

Japanese investors got their Korean fix last week when Shinhan Bank issued a ¥30bn ($301.3m) Samurai, providing supply to a market that had not seen a Korean deal since January.

The offshore version of China’s renminbi currency is continuing to grow in trade settlement and product usage, and is gaining the support of an increasing number of banks. ASIAMONEY’s second Offshore Renminbi Poll reveals which banks are considered the best providers of renminbi products by the companies and investors that use them.

Bejing is committed to scraping the floor on lending rates but the immediate effect on borrowing costs is likely to be minimal, leading to the need for more reforms including the liberalisation of deposit rates.