Asia Pacific

Strategists at the French bank predict the Hong Kong Monetary Authority relaxation of the rules surrounding banks’ exposure to offshore renminbi will lead to a surge in FX swap trading and act a spur for greater bond market activity.

Hangzhou ZhongCe Rubber raised Rmb900m ($139.7m) this week, braving a market that has taken knocks over the last month as fears about European sovereign debt and the US debt ceiling finally hit a market that has been steadily rising for much of the year.

The country’s finance ministry intends to issue up to Rmb10 billion of renminbi-denominated bonds in August or early September, marking the sovereign’s third foray into the Hong Kong-based debt market, market sources said.

Singaporean water management provider Hyflux priced an oversubscribed S$100m ($82.1m) bond last week, turning to private banks to help close the deal as investors in other markets stuck to the sidelines.

China Shanshui Cement priced a Rmb1.5bn ($232.4m) CNH bond last Friday, in a rare example of good news from the Chinese credit space. The deal completed during a week of postponed and cancelled deals, as three other dim sum deals were pulled.

The third-largest Australian metal mining group is planning to tap the burgeoning offshore renminbi bond market in Hong Kong. If it does it will become the first Aussie issuer to print renminbi-denominated bonds in the former British colony.

Several mainland lenders are stepping up to bolster their war chests in anticipation that Beijing will raise capital requirements. China Merchants Bank has just issued new shares, but other mainland lenders look more likely to issue offshore bonds.