China

The impact of the UK’s decision to abandon its European Union membership hit Asian equity capital markets with varying degrees of intensity this week, with some IPOs wobbling and others braving market jitters to launch deals. But orders have become smaller and there is a clear flight to safety among investors. Jonathan Breen and John Loh report.

China is pushing on with the development of its non-performing loans securitization market, which only restarted last month, with China Merchants Bank (CMB) sealing the asset class’s third transaction.

The loans team at Standard Chartered in Hong Kong has undergone a number of changes, with new bankers coming into the fold to replace those who have left recently.

The outcome of the Brexit referendum has cast a shadow over London’s ability to maintain its status as Europe’s foremost RMB business hub. In this lowdown, GlobalRMB pits three other European capitals – Frankfurt, Luxembourg, and Paris – against the City as the most likely contenders for Europe’s RMB crown.

The list of Chinese real estate firms seeking to take advantage of the country’s Panda bond market is getting longer, with Agile Property Holdings the latest to have its application approved.

China’s Ministry of Finance completed a Rmb14bn ($2.17bn) auction of offshore renminbi government bonds on Wednesday, with strong demand from investors resulting in a more than three times covered transaction.

The London Stock Exchange (LSE) could be closing in on an equity trading link for UK-listed depositary receipts by Chinese firms that would see the participation of Euroclear and LCH.Clearnet, GlobalRMB has learned.

Citic Envirotech has priced a $180m tap of its existing $175m 5.45% perpetual notes at the tighter margin of 4.25%, becoming the first Asian G3 bond issuer since the UK’s decision last Friday to leave the European Union.

HSBC and Bank of China were among the first banks to act as market makers for the newly established direct trading of the Korean won and the RMB this week, just as a first batch of offshore-based banks got approval from Chinese authorities to access the onshore currency markets.

The RMB remained a tiny portion of payments between the US and China in May, according to the latest Swift data. Meanwhile, the RMB remained in sixth position among the most used payment currencies.

The market reaction to the UK’s surprise decision to leave the European Union has been immediate with stocks falling, the pound weakening and the country downgraded by international rating agencies. But market participants are worried that the worse has yet to come and London could be set to lose its shine as a premium renminbi hub.

China Resources Pharmaceutical Group and Cofco Meat Holdings are planning to float on Hong Kong’s main board, having filed for approvals from the city’s exchange on Monday.