China

Bank of China (BoC) launched a new renminbi bond index simultaneously in London, Beijing and Singapore on October 20. The index is aimed at getting more foreign investors buying onshore bonds and in turn further boost the use of RMB globally, Le Yan, deputy general manager of Shanghai RMB trading unit, financial markets department at Bank of China, told GlobalRMB.

Hong Kong and London’s futures and commodities exchanges have singed a pact to develop a trading link between Hong Kong Futures Exchange (HKFE) and the London Metal Exchange (LME), alongside a clearing link to be called the London-Hong Kong Connect.

Dongfeng Motor Group made a successful offshore debut with a euro-denominated bond this week, which is expected to provide a benchmark for Chinese auto companies eyeing euro notes.

The Republic of Korea has picked six banks for a bond that will include the first renminbi-denominated trade from the sovereign. The RMB portion is highly likely to be issued offshore but there’s also a possibility that the country will attempt to enter the recently reopened Panda market.

China Universal Leasing is seeking to manage borrowing costs on an offshore Rmb1.5bn ($236m) loan sealed last year by changing the benchmark to the People’s Bank of China rate from CNH Hibor.

The question about whether the renminbi will be included the IMF Special Drawing Rights basket of currencies has already been decided. At least that’s the view from industry experts who are preparing for life after the RMB becomes a reserve currency.

The People’s Bank of China priced its first offshore renminbi bond late on October 20, raising Rmb5bn ($788m) in a deal widely hailed as an important milestone in the internationalisation of Chinese capital markets.

China Reinsurance has pulled off one of the year’s largest IPOs in Hong Kong, and all signs are pointing to an equally positive finish for China Huarong Asset Management. But while their success bodes well for market sentiment, participants would be wise not to oversell a recovery too quickly.

Chinese company Minsheng Financial Leasing, which launched a $200m offshore loan in July, has reduced the margin on the deal by 45bp.

The Hong Kong subsidiary of Chinese conglomerate Peking University Founder Group has hit the syndicated loan market for a financing of $80m with one bank at the helm.

Dongfeng Motor Group is set to make its debut in the euro-denominated bond market on Tuesday, as the company aims to raise proceeds to pay back part of a bridge loan in the currency.

Short-end CNY swaps were well offered this morning after the US softened its official assessment on the yuan and the PBoC injected liquidity into the system. An early steepening move then pushed receivers into the mid-sector of the curve. In addition, the PBoC is planning a CNH bond issue, writes Deirdre Yeung of Total Derivatives.