China

Dollar investors had plenty of Chinese property bonds to choose from this week, with four issuers competing for their attention on Tuesday. But with no end in sight to the pipeline, companies will have to navigate the market carefully, or cough up a premium for their bonds.

Chinese issuers BOSC International, a local government financing vehicle from Henan, Lai Fung Holdings and Hilong Holding are in the market with new deals on a busy day for issuance.

Chinese technology giant Tencent Holdings is taking feedback from global investors for a 144A/Reg S transaction, and is looking to hit the market on Thursday morning.

India’s IL&FS Transportation Networks launched an offshore renminbi bond on Wednesday morning, following Westpac Banking Corp’s opening of the dim sum market earlier this week.

China Aircraft Leasing Group Holdings (CALC) has sealed a rare asset-backed securities deal in the onshore market — the first dollar-denominated ABS to be publicly traded. But while the transaction holds symbolic significance, the format is unlikely to become the norm for the Chinese ABS market.

The People’s Bank of China has reportedly tweaked the way it sets the daily renminbi fix against the dollar, abandoning a key control mechanism it introduced last May. While some analysts hail the move as a sign of confidence from China, others say it exposes the failure of the PBoC’s previous FX policy.

European stock markets have enjoyed a solid start to 2018, led by a metals and commodities rally that has been strengthening since the beginning of autumn. But the market must consider whether the good times are organic or due to temporary measures in China.

Westpac Banking Corp raised Rmb500m ($77m) from a three year offshore renminbi bond on Monday, becoming the first dim sum note issuer of 2018.

DCM bankers often market Panda bonds as Belt and Road bonds, even when they have little to do with China’s landmark infrastructure plan. But in recent weeks, issuers with genuine needs for funding Belt and Road projects have started to tap the market. The change could open up a new frontier for RMB internationalisation.

Investors lapped up Longfor Properties Co’s $800m bonds on Monday, in a vote of confidence not just for the investment grade rated Chinese company but also the broader property industry.

Power Construction Corporation of China (PowerChina), Bank of Shanghai subsidiary BOSC International Company and financial services firm Guangxi Financial Investment Group Co are testing investor appetite for new bonds.

Property companies Country Garden Holdings Co (CoGard), Times Property Holdings, Tahoe Group Co and Wharf Real Estate Investment Company hit the dollar debt market in force on Tuesday.