China

There is little doubt the RMB had a tough 12 months. But despite the headwinds, China has managed to push through landmark reforms to the capital account and more initiatives are in store for 2017. In the first part of this outlook, market participants discuss how RMB internationalisation (RMBi) will benefit from opening up of onshore hedging products and the far-reaching impact of recently-established New York hub.

In the second part of the GlobalRMB’s outlook on renminbi internationalisation in 2017, market participants discuss the far-reaching impact of the recently-established New York hub.

In this round-up, RMB-denominated cross-border trade settlement suffers a big setback in 2016, turnover in the Chinese interbank foreign exchange (FX) markets revolves almost entirely around dollar trades, and GF International launches a China A-shares fund on the London Stock Exchange. Plus a recap of our coverage.

Cigarette package printer Amvig Holdings, which launched a HK$1.6bn ($206m) equivalent dual currency refinancing in December, has allocated the borrowing after 12 banks joined lead ANZ to form the syndicate.

SEA Holdings, Guangzhou R&F Properties and a Changchun local government financing vehicle took advantage of the abundant liquidity in the bond market by locking in funds on Thursday.

China has come in for a lot of criticism for introducing more capital controls since the start of the year in order to combat outflows. While such restrictions clearly do not fit under the headline of financial liberalisation, the market needs to understand that they are a necessary evil for China to have enough time to correct economic imbalances.

M&A in Asia has started on a strong note this year, with the first big financing — for McDonald’s China’s $2.08bn acquisition by Citic and Carlyle — under way. While details of the syndicated loan are limited at this stage, the transaction has already gathered plenty of attention from bankers, writes Shruti Chaturvedi.

The first two weeks of January have not brought the surge of new issuance that many expected, but the response to bonds so far shows that investors have grown surer of themselves compared to the end of 2016. Market watchers are now hopeful that Chinese New Year will mark the real start for deals, with February expected to bring roaring trade. Morgan Davis and Addison Gong report.

Taikang Insurance Group had no problem finding demand for its debut, gathering $2.4bn worth of orders at its peak for a $800m bond on Wednesday. The deal is only the second from a Chinese name and the first from a financial credit in Asia ex-Japan in the New Year.

Corporates from Hong Kong, China and Singapore were clamouring for investors’ attention on Thursday for their respective offerings.

The names of banks that subscribed to China Universal Leasing's Rmb2.03bn ($293m) fundraising is out. The company signed the loan on January 6 and the first draw down is expected to happen as early as Friday.

The rising tide of capital outflows from China has left experts debating Beijing's best course of action. While there are a number of options, none are likely to generate long-term confidence in the renminbi.