China

UBS (China) has launched the first product under China’s newly launched renminbi-denominated qualified domestic institutional investor (RQDII) scheme, spokespeople for the bank have confirmed to GlobalRMB. The product will make investments related to high yield credit-linked notes issued in North America, according to a memo issued by the bank last week.

The Standard Chartered (StanChart) RMB Globalisation Index (RGI) reached 2,048 points in November 2014, up 1.2% on the previous month, according to a January 12 report from the bank. StanChart analysts estimate that the index will go up to 2,500 points by the end of 2015, a slower rate of growth than this year’s 500 point rise.

Air Liquide Finance, a subsidiary of L'Air Liquide SA, the French industrial gases group, debuted in Taiwan’s Formosa bond market on January 9, becoming the first international corporate to issue in this format.

As the new year begins, GlobalRMB takes a look at seven key themes for RMB internationalisation in 2015. These are the topics and predictions most highlighted to us this week by analysts, economists, strategists, bankers and regulatory experts, and offer an outlook of how the market is expecting the world of the renminbi to shape up in the next 12 months.

As the first overseas renminbi hub outside Hong Kong, there were high hopes for Taiwan when it got its official RMB clearing bank in December 2012. But although its local RMB market has gained ground through its RMB deposit base and the expansion of the Formosa bond sector, Taiwan is falling behind as attention spreads to the emerging hubs elsewhere. More regulatory hurdles need to be removed for RMB internationalisation to take off in 2015.

In this round-up, Hong Kong RMB clearing is back on the rise, Bank of China receives ISO certification for RMB clearing activities, average daily turnover on the Stock Connect was Rmb5.6bn ($900m) and China’s Xi Jinping pledges $250bn of fresh investment in Latin America.

JP Morgan Asset Management (JPMAM) in Singapore received an RMB qualified foreign institutional investors (RQFII) licence from the Chinese regulator on January 8. The firm joins the rapidly growing ranks of RQFII licensees around the globe.

The Hong Kong Stock Exchange (HKEx) will allow short-selling on the Shanghai-Hong Kong Stock Connect later this month and will unveil a system to track investors' holdings in March, the latest in a series of measures to lift sagging volumes on the trading link.

The Shanghai-Hong Kong Stock Connect initiative opened to much fanfare on November 17, but the enthusiasm quickly gave way to much disappointment as trading volumes collapsed in the following days. It can be tempting to dismiss the initiative as something of a failure, but dig a little deeper and it is clear that the programme’s potential is still untapped. It could well revolutionise the Chinese market in 2015, just as it was supposed to.

Industrial and Commercial Bank of China's European arm wrapped up a series of investor meetings in December for its debut Renminbi Qualified Foreign Institutional Investor (RQFII) fund, which it had established in Luxembourg in October. As the very first RQFII fund to have 100% exposure to China’s domestic bond market, the benchmark product has attracted big interest from European investors, as well as some concerns about what is still a new concept, the bank has told GlobalRMB.

The People's Bank of China (PBoC) announced on January 6 that it had approved Industrial and Commercial Bank of China (Thailand) to be the official renminbi clearing bank in Bangkok. The selection is the second in 2015, coming just one day after Bank of China (Malaysia) was awarded the same role in Kuala Lumpur, and adds a new hub to the global RMB map.

The Bank of China’s Offshore RMB Index (ORI) rose slightly to 1.19% in the third quarter of last year, according to a report by the bank. The index pointed to growth in offshore RMB deposits, RMB equity investment and RMB usage in FX trading as key factors behind the increase.