Asia Pacific

Li Keqiang, Vice Premier of the People’s Republic of China, gave debt bankers plenty of reason for excitement on Wednesday: announcing a number of long-awaited schemes that would help develop the offshore renminbi market, including the creation of mini-QFII licenses. But the devil is in the detail, and analysts are wary of getting too excited by what are still rather vague pledges.

To bolster Hong Kong’s position as the offshore renminbi hub, the visiting vice premier of State Council Li Keqiang said the central government will make the renminbi Treasury bond issuance in the city a long term institutional arrangement.

The Shanghai Rural Commercial Bank (SRCB) has underlined its plans to build out its trade finance and FX business with the hire of ex-ANZ banker David Chan. ANZ has a 19.9% stake in SRCB

China has increased its holding of US Treasuries for the last three months contrary to the perception it's doing otherwise. Analysts argue there are few other low risk, liquid options for the country now.

Potential issuers of dim sum bonds are still concerned about the prospects of remitting offshore renminbi into China pleading the case guidelines are still too vague and uninviting.

DCM and syndicate bankers are eagerly watching the Chinese government’s auction of offshore renminbi bonds this week before they attempt to launch new deals in the dim sum market. But there is some debate over how useful the multi-tranche deal will be for pricing future issues.

The Republic of Indonesia is expected to pick three leads to manage an Islamic bond issue worth as much as $1bn, which could be sold as early as next month.

Chinese banks are lining up their own offshore renminbi bonds in Hong Kong. The upcoming sovereign dim sum bond from China’s finance ministry should set a benchmark for those lenders, but it is the stronger renminbi looks set to spur the demand.

Export-Import Bank of Korea (Kexim) this week gave debt bankers in Asia a flicker of hope in what was otherwise a depressingly quiet week. After turning to the offshore renminbi market for funding, it sold three small deals that beat the policy bank’s price targets.

Despite the global financial market turmoil triggered by the US credit rating downgrade, borrowers in Asia, Korean Air and McDonald’s, are hopeful to get their dim sum bond deals completed this month. Not everyone is convinced this will happen.

Asian companies hoping to raise money in the bond market had better be patient — and ready to strike at a moment’s notice, said bankers on Monday. The region’s stock markets plummeted en masse as investors dumped their holdings or took out new short positions following Standard & Poor’s downgrade of the US last week, and bankers think the psychological effect of such prolonged and violent falls will make any new bond activity unlikely.