China

China has sought yet more intervention to heal its wounded stock market, with the Shanghai, Shenzhen and futures bourses mooting the idea of new circuit breakers that would suspend trading of shares altogether if certain thresholds are breached. But market watchers are divided over whether the move would be a blessing or spell more trouble, writes John Loh.

Hong Kong Tian Yuan Manganese International Trade, which sent out invitations for a $150m loan this week, is now understood to have cancelled the transaction after second thoughts on the impact of a weaker renminbi.

HKEx boss Charles Li hinted on Monday that the recent equity turbulence and surprise currency devaluation meant conditions were not ripe to expand the Stock Connect programme to include Shenzhen. He is wrong and to delay would be a terrible idea.

Following the surprise devaluation of the renminbi by the People’s Bank of China, speculation has been rife about whether Hong Kong will move its peg from across the Atlantic to its neighbour. In separate reports, ANZ and AXA Investment Managers conclude that a shift from the US dollar to the RMB is unlikely in the short term due the latter’s market volatility and unfinished internationalisation, writes Daniel Monteiro.

The Export-Import Bank of China (Chexim) introduced a new structure into Asia’s debt market this week, becoming the first issuer to sell bonds backed by loans. Some investors shied away from the unfamiliar format, but the Chinese policy bank raised $1bn from the dual tranche offering.

The China foreign exchange trade system (CFETS) published a list of the first institutions to be granted access to the Chinese interbank bond market (CIBM) since a streamlined programme was introduced in July.

Hong Kong Exchanges (HKEx) CEO Charles Li said earlier this week that a stock market rout in China had made talks of expanding the mutual market access initiatives, including the expansion of the Shanghai-Hong Kong Stock Connect to Shenzhen, more difficult.

Respondents to a new survey by Standard Chartered Hong Kong branch (StanChart HK) are expecting further devaluation of the RMB, but an even larger proportion said they would continue to hold or even expand the quota of RMB-denominated assets in their portfolios.

China plans to allow foreign central banks to participate in its onshore foreign exchange market, premier Li Keqiang said in his keynote speech at the World Economic Forum held in Dalian on Thursday. It supports last month’s statement from the People’s Bank of China’s (PBoC) that qualified foreign entities are welcomed in China’s onshore FX market.

A $165m triple-tranche loan for CVC-sponsored Asia Education Investment has been allocated, with three lenders joining during general syndication. The response was considered muted by some but the leads said they only had a limited portion to sell down to begin with.

Hong Kong Tian Yuan Manganese International Trade, which sent out invitations for a $150m loan on Monday, is understood to have now cancelled the transaction.

Asian bond issuers have finally decided to venture back into the market with a trio of investment grade names opening books to dollar deals. Export-Import Bank of China (Chexim), Shanghai Pudong Development Bank and Korea Development Bank are vying for attention in the first test of investor demand in three weeks.