China

The usage of renminbi in Africa has long been talked up given China’s status as the continent’s largest trading partner. Developments over the past couple of years have been slow, however, though there are now signs of activity with several African nations visiting Hong Kong in November to learn more about RMB reserves management.

CAR, formerly known as China Auto Rental, is one step further along with its plan to sell a Panda bond, having received approval from China Securities Regulatory Commission (CSRC).

The Standard Chartered (StanChart) RMB Globalisation Index dropped further in June to a two year low of 1,933 points on the back of poor cross-border renminbi payment volumes, the bank said on August 9.

There was no sign of a summer slowdown in Asia’s bond market last week with five deals pricing in one day. But that momentum has not carried over into this week as a public holiday takes out some of the heat. But any pause is likely to be temporary, say bankers.

China Gas Holdings is laying the groundwork for its second Panda bond of the year having applied to the Shanghai Stock Exchange for an issuance quota not exceeding Rmb7bn ($1.05bn). But unlike its debut in the asset class at the start of the year, the issuer will be targeting a wider investor base through a public offering.

DBS’ head of treasury and markets says there is room for the renminbi to appreciate in the short term. While the longer-term trend is for the currency to fall, the bank’s forecast for USD/CNY remains more upbeat than the market consensus.

Aluminum Corporation of China (Chalco) has registered plans to sell a new foreign currency bond with the National Development and Reform Commission

Yunnan Water Hong Kong Co, an affiliate of Chinese provincial government backed Yunnan Water, has capped its latest borrowing at $130m despite having sought $150m originally.

In this round-up, China is open to free trade agreement talks with the UK, China Foreign Exchange Trade System sees its RMB index recover, and China Taiping Insurance Group is set to venture into the domestic mutual fund market. Plus, a recap of GlobalRMB’s top stories this week.

A Chinese company-led consortium is set to use staple financing worth A$800m ($606.4m) to back its acquisition of a stake in Australia’s GenesisCare. The transaction has piqued the interest of loan market participants given how rarely the instrument is used in Asia, writes Shruti Chaturvedi.

China is exploring the possibilities for its small and medium enterprises (SMEs) to start borrowing in offshore renminbi as part of an ambitious five year plan to internationalise the sector.

HSBC’s Asia business accounted for a higher share of the bank’s earnings during the first half of the year, as the bank continues to develop its business in the region.