China

The CSRC has just announced rules that will allow top tier Chinese companies to issue preference shares. While more clarification is needed, those banks most in need of capital should get ready to launch, as Basel III related supply is likely to far outweigh demand, write Clare Hammond and Rev Hui.

Chinese financial leasing companies could start making their presence felt in the dim sum bond market next quarter after changes this month opened up the funding channel for this group of issuers. But while the sector has a strong growth trajectory, its association with shadow banking may put investors off, writes Isabella Zhong.

Deutsche Bank has appointed Evan Goldstein as global head of renminbi services in what is a newly-created position at the firm. The bank said that the move was in response to what it said was a surge in demand from clients for renminbi services as the internationalisation of the currency continued to gain momentum.

Taiwan is planning a partnership with Singapore and London to establish an offshore renminbi bond issuing and trading platform to promote its CNH bond market, as well as its offshore renminbi hub status, said Soushan Wu, chairman of the Gretai Securities Market, in an interview with GlobalRMB.

The China Securities Regulatory Commission will allow a selection of mainland companies to issue preferred stock, and analysts expect banks to make full use of the rule change, with Rmb150bn ($24.1bn) expected over the next year.

In this week’s round-up of offshore renminbi news, the New Zealand dollar and the Chinese yuan were given approval to begin direct foreign exchange trading this week, Westpac received a NZD/CNY marketmaker licence in China, and the Chinese authorities relaxed rules to allow more foreign participation in its main stock market.

For the last few months, China Development Bank has been planning an offshore renminbi deal in the ASEAN region. Last week it pushed the button, and found demand where it wanted it. But while using allocations to target a location is all very well, the real breakthrough will be the development of a vibrant secondary market.

Investors from Europe, the Middle East and Africa rushed to buy the International Finance Corporation's second ever sale of London-listed renminbi bonds this week. The deal, a tap of three year notes, was a sign of growing international interest in the currency, according to the issuer.

Maoye International Holdings did not manage to price its debut dim sum bond this week despite leaving books open for four days. Bankers away from the trade suggest that one of the reasons the deal failed was because it didn’t secure an anchor account, raising questions about the reliance on these investors in high yield offshore renminbi bonds, writes Virginia Furness.

A new Panda bond issue by German car manufacturer Daimler has established a milestone in RMB funding for offshore borrowers, marking the first ever such deal from a corporate name. The Rmb500m ($81m) one year paper priced at 5.2% on Friday, March 14 and was privately placed through Bank of China.

China's decision to double the trading band for the renminbi against the US dollar, which was announced at the weekend and took effect on Monday, is a further step towards the full liberalisation of the currency, say analysts and traders.

Maoye International Holdings is yet to price its debut CNH bond which has led to market speculation that the deal has been pulled. However, bankers on the trade continue to say that books are still open.