China

The central bank governors of France and China on Sunday signed a memorandum of understanding (MoU) that will lead to the appointment of an RMB clearing bank in Paris. Switzerland, meanwhile, is laying the groundwork for its own swap line.

In this round-up, the RMB is now the second most used currency for China-Hong Kong cross border payments, StanChart issues Taiwan RMB predictions, JP Morgan launches a new RMB-hedged share class for a bond fund, and Australia hopes for its own RMB clearing bank soon.

The London Stock Exchange (LSE) is looking at ways to expand its RMB offering, having established itself as a destination for offshore dim sum bond listings and RQFII Exchange Traded Funds (ETFs).

Reforms that China is implementing in the Shanghai Free Trade Zone (FTZ) are beginning to trickle out elsewhere. From Friday June 27, the People’s Bank of China (PBoC) is liberalising the deposit rate on foreign currency in Shanghai.

International Finance Corporation (IFC) is quickly establishing itself as an innovator among foreign issuers in the Chinese currency, having bagged two successful bonds since the start of the year. The most recent — a three year Rmb500m ($80m) green bond listed in London — was a first in the market. In an interview with GlobalRMB, Monish Mahurkar, director of treasury client solutions, pledges more innovation.

Beijing Infrastructure Investment (Hong Kong) priced its debut offshore renminbi bond last Friday. The issuer took an exhaustive approach to preparing the deal and was rewarded with tight pricing.

China City Construction (International) made its debut in international markets on Wednesday. Despite drawing a well subscribed order book for the Rmb2.5bn ($405m) issue, the state owned borrower wanted to leave some money on the table to ensure good secondary performance.

Hang Seng Bank (China) issued its inaugural bond in international markets on Wednesday, printing a Rmb1bn ($162m) three year. Fueled by rarity value and the issuer’s solid reputation, pricing for the trade landed well inside of a quasi sovereign comparable.

UK Export Finance is planning to boost British exports to China through a long term RMB loan-backing initiative. HSBC is the first partner on the scheme.

Agricultural Bank of China (ABC) and the London Stock Exchange (LSE) are exploring how to launch renminbi-denominated Global Depository Receipts (GDRs) in the UK in what would be a landmark development of the offshore RMB market, two market sources have told GlobalRMB, a sister publication of GlobalCapital Asia.

China’s Hua Xia Bank made its inaugural issue in international bond markets on Tuesday, notching up a big order book for a Rmb1bn ($160m) three year dim sum that allowed it to tighten 30bp from guidance.

China City Construction (International) unveiled its inaugural bond in international markets on Wednesday, offering investors a three year offshore renminbi deal.