China

The People’s Bank of China (PBoC) this week said it would expand the scope and the size of its Qualified Domestic Institutional Investors (QDII) and Qualified Foreign Institutional Investors (QFII) schemes, as it pushes towards capital account convertibility. Market participants reckon the changes could help lift sluggish activity, but it might not be enough to reduce the attractions of a QDII/RQFII arbitrage trade that has become popular.

Hong Kong Huafa Investment made its first issue in the offshore renminbi market on Wednesday with a Rmb850m ($138.2m) three year bond.

MSCI said on Wednesday that it would not include A-shares in its Emerging Markets Index for the time being, shortly after FTSE had said it would make available a set of custom indices allowing clients to include A-shares if they wished.

Hong Kong Huafa Investment unveiled its debut offshore renminbi bond on Wednesday. The three year issue is the second dim sum transaction this month to be backed by a standby letter of credit (SBLC).

Banks that have already helped a number of corporates in the Shanghai Free Trade Zone (FTZ) integrate China treasury operations with regional and global centres are looking forward to the day when the potential of recent reforms is fully realised. The logical next step, they say, is for RMB cross-border two-way sweeping to be available to all corporates in China, not just those based in the FTZ.

The China Securities Regulatory Commission posted on social media Weibo that it has approved 10 IPO applications, paving the way for A-share listings to resume for the second time this year.

China’s State Administration of Foreign Exchange (Safe) is planning to make the Renminbi Qualified Institutional Investor (RQFII) scheme more flexible by allowing institutions to allocate their quota to any of their own RQFII products, instead of having to apply for product-based approval on a case by case basis, two RQFII fund managers have told GlobalRMB.

China Minmetals Corporation returned to the offshore renminbi market with a three year bond on Monday. Despite coming in the shadow of a record month for Chinese CNH supply, the unrated transaction was well bid and priced through the issuer’s existing curve.

Four banks are on board the offshore Rmb800m ($130m) one year loan for the e-commerce arm of China Minsheng Bank – Minsheng E-commerce.

AVIC priced the third ever standby letter of credit backed dim sum bond on Friday. Competing supply last week meant that the borrower had to pay up over other Agricultural Bank of China-backed bonds.

China Minmetals Corporation has opened guidance on a new dim sum bond and joins China Metallurgical and Sinopec in the market in what looks a bumper day for Chinese SOE issuance.

Dim sum bond issuance so far this year has now swept past the volume for the whole of 2013. That in itself is striking, particularly at a time of renminbi weakness. But while the surge in deals is the most obvious progress, there are plenty of more fundamental developments taking place.