China

Taiwan regulators have lifted the ceiling for outstanding Formosa bond issuance, almost doubling the limit from last year's Rmb25bn to Rmb45bn ($7.2bn). The move was announced in late December by the country's Financial Supervisory Commission (FSC).

The start of the Shanghai-Hong Kong Stock Connect pilot is helping to drive up offshore renminbi futures volumes, particularly from international investors, as market participants look to manage currency risk from growing A-share exposure.

In this round-up of news over the holiday period, Malaysia gets its own offshore RMB clearing bank, Thailand's central bank renews its RMB swap line, Bank of China and the Stock Exchange of Thailand agree to expand co-operation, Hong Kong RMB deposits rise in November, China started forward and swap trading with three new currencies, and Serbian market participants can now trade RMB in their national market.

Beijing Energy Investment Holding (BEIH) issued what looks to be Asia’s last dim sum bond in 2014 on December 16. Despite the issuer’s status as an SOE wholly owned by the municipal government of Beijing, it was not able to tighten guidance by much due to low liquidity in the market.

China’s renminbi qualified foreign institutional investors (RQFII) programme and the recently-launched Shanghai-Hong Kong Stock Connect initiative have made some of the biggest contributions so far to tearing down the Great Wall surrounding China’s capital markets, while simultaneously providing a springboard for the broader adoption of China’s currency around the globe.

In this round-up, China cross border RMB settlement is down 0.5% in November, Taiwan RMB deposits were stable in November, China signed an RMB swap line with Kazakhstan and the Royal Bank of New Zealand (RBNZ) said it would include RMB in its trade index.

Following a record year for offshore RMB (CNH) bond issuance in 2014, HSBC is expecting gross annual issuance for bonds and certificate of deposits to stabilise at around Rmb500bn ($80.8bn) next year.

Shinhan BNP Paribas Asset Management Company is preparing three RQFII funds and could launch the first as soon as January 2015, according to Deogjin Jang, deputy CEO. In October Shinhan BNPP AMC became the first South Korean firm to be awarded an RQFII licence.

Market participants have hailed China's recent decision to open up a second group of Free Trade Zones (FTZs) as further evidence of the country's determination to press ahead with the overhaul of its economic and regulatory framework. Prime minister Li Keqiang announced on December 12 that three new FTZs would be launched, in Guangdong, Tianjin and Fujian.

Three of the largest euro funders in the supranational and agency market are set to reduce their issuance in the currency next year. But renminbi could form a bigger slice of at least one issuer's 2015 business.

London experienced a near doubling of its RMB deposit base in the first half of 2014, according to a report commissioned by the City of London Corporation and published on December 15. RMB-denominated foreign exchange trading also increased by 116% to $54tr, while RMB trade finance grew by 79% to Rmb26.5bn ($4.3bn).

In this round-up, a Shanghai-Hong Kong Gold Connect may be in the works, the United Arab Emirates could activate its currency swap line with China soon, and two Chinese asset managers raise funds for the first Stock Connect-linked ETFs to be launched in the mainland.