Asia Pacific

The appreciation of the renminbi has been a big driver of dim sum bond buying since the market opened less than two years ago, but increasing doubts about the rise of the currency have made investors more and more on yields. But there is still room for the currency to go up, according to Brian Jackson, a senior strategist at RBC Capital markets.

The country should achieve liberalisation of its capital account by 2015 after the latest measures to restrict movement of the renminbi, predicts Barclays.

Bank of East Asia returned to Singapore’s local bond market to raise another S$200m ($160m), just a month after the Hong Kong lender debuted in the city-state's debt market with a tightly-priced lower tier two bond.

Philippine developer Vista Land and Lifescapes want to raise Ps4.5bn ($106m) from its first-ever bond in its domestic market this week, turning to local accounts after selling two deals in the international bond market.

Hong Kong’s development of exchange-traded renminbi futures will boost liquidity in the market and further development of more renminbi products, say derivative experts.

IL&FS Transportation Networks Ltd (ITNL) raised Rmb630m ($100m) from its debut in the offshore renminbi bond market late last week, becoming only the second Indian issuer to ever sell offshore renminbi bonds.

In strengthening its renminbi capabilities London should develop regulations which mirror that of Hong Kong, lest investors see a divergence of pricing offshore, say economists.

The UK bank’s new offshore renminbi bond issue may not have set debt capital markets alight but it marks a clever strategic move.

A London market for offshore renminbi is still no more than nascent. But HSBC’s carefully choreographed Rmb2bn deal this week, the first to be executed in London, has been hailed even by rivals as an important step in the development of the asset class. Whether it will help the City to be a “bridge between East and West”, in the words of UK chancellor George Osborne, remains to be seen. But as Katie Llanos-Small writes, the prospects look strong.

Banks - from both the West and China - are poised to be the first issuers of dim sum bonds in London, signifying their support for London and their desire to get into the market early.

Fund managers consider borrower quality and bond yields to be the paramount considerations for buying offshore renminbi debt, and they believe the currency will keep appreciating in the long-term.