China

One month into the reopening of China’s equity market and the doomongers that had predicted a resulting dire year for Hong Kong IPOs are noticeably quieter. But while A-shares are certainly enjoying a revival, Hong Kong still has the edge when it comes to pricing and pipeline.

Central Plaza Development received overwhelming demand for its new three year deal on Monday but struggled to get much investor interest for the five year tranche due to investor wariness about longer tenors and the issuer’s reluctance to push pricing.

Holders of private placement notes (PPNs) issued by Luoyang Mining Group have asked for early redemption in what is the first such case in China’s domestic market. A creditors’ meeting will be held today, sources close to the situation have told Asiamoney.

Central Plaza Development kicked off issuance under its newly established $1bn-equivalent MTN and perpetual securities programme on Monday evening, pricing a Rmb2.25bn ($371m) dual tranche dim sum bond, the first since the Chinese New Year holiday.

The broader sell-off that hurt the dollar bond market last week did not make its presence felt in offshore renminbi. Bankers are confident that a flood of issuers will come to market after Chinese New Year to take advantage of favourable conditions such as stable secondary market performance, positive arbitrage options and a receptive investor base.

The outstanding size of the dim sum market will rise more than 30% this year, according to Standard Chartered senior rates strategist Becky Liu in a report published on Wednesday. Liu predicts that the market will exceed Rmb750bn ($124bn), up from Rmb572bn at the end of 2013 — with strong primary issuance of Rmb550-Rmb580bn.

The Renminbi Qualified Institutional Investor (RQFII) scheme is set for another milestone as China enters the Year of the Horse, with the first batch of exchange-traded fund (ETF) products investing in China’s onshore government bonds due to be launched around the middle of February. The new move will help establish a benchmark for all RQFII bond products.

The broader sell off that has hurt the dollar bond market is not making its presence felt in offshore renminbi. Bankers are confident that a flood of issuers will come to market after Chinese New Year to take advantage of favourable conditions such as stable secondary market performance, positive arbitrage options and a receptive investor base.

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings has completed a series of fixed income investor meetings in Singapore and Hong Kong that could result in the company’s first ever bond. But bankers questioned why a first-time issuer would court investors in such difficult market conditions.

Gazprombank returned to the offshore renminbi market on January 23, raising double the amount it managed on its debut last year and becoming the first Russian issuer to tap the CNH market in 2014. The third largest bank in Russia also made use of a strong existing European investor base, attracting the biggest demand from that region for a CNH bond this year.

The first trade financing by a foreign bank operating in the new Shanghai pilot Free Trade Zone (FTZ) has been completed, with the sub-branch of DBS’s Chinese operation arranging a cross-border foreign currency letter of credit for Jeans International Trading, a company based in Zhejiang.

Chu Kong Petroleum & Natural Gas Steel Pipe Holdings has completed a series of fixed-income investor meetings in Singapore and Hong Kong which could result in the company’s first ever bond. However, a profit warning from the company has led bankers to question why a first-time issuer would court investors in such difficult market conditions.