China

Dim sum supply has had an explosive start to the year, with a torrent of deals from on and offshore issuers taking supply to four times what it was in the first two weeks of last year’s record six month run. But even more impressive is the appetite for yield, exemplified by Trade and Development Bank of Mongolia’s debut in the currency, which despite modest size signals the extent to which dim sum boasts a thriving high yield segment absent in any other Asian currency bond market, writes Steve Gilmore.

Export-Import Bank of Korea (Kexim) priced its debut bao dao Formosa bond on Thursday night, selling Rmb500m ($82.6m) of 10 year notes in Taiwan to yield 4.50% — alongside another Singapore listed five year tranche. The deal not only marked the first renminbi-denominated bonds in Taiwan from a Korean issuer, but also attracted attention because of its innovative structure of combining a Formosa transaction with another format of offshore renminbi bond.

DNB Bank priced ¥81.6bn ($780m) of five year Samurai bonds on Friday, its first Samurai deal since January 2012. Not only did the issuer get a bigger deal away this time, it also reached more than three times as many investors as it did with its last transaction.

Volkswagen International Finance returned to the dim sum market on Thursday, but despite a well established curve and a fantastic brand name, it had to offer a higher premium to its existing renminbi bonds in the face of competition from other issuers for investor attention.

Gazprombank has picked banks for investor meetings with an eye on a dim sum transaction, following a huge two weeks of issuance in that market.

Export Import Bank of Korea sold its first renminbi transaction since 2012 on Thursday night, launching a Rmb1bn dual tranche bond split evenly between five and 10 year tranches. The issuer also took the unusual approach of listing the tranches on different stock exchanges — becoming the first to do so — selling the ten year bond in Taiwan and the five year in Singapore.

It was another busy week for the China A-share IPO market, with deals priced, delayed and rescheduled after the China Securities Regulatory Commission announced last weekend that it would be toughening its IPO process.

The Singapore dollar market is finally showing signs of life this week after a slow start to the year, and was on track for a deal a day by Thursday evening. Aspial Corp, Croesus Retail Trust, Hylux, Ezion Holdings and Standard Chartered all launched well received bonds, as debt bankers proclaimed the market on form for 2014.

Dim sum supply has had an explosive start to the year, with a torrent of deals from on and offshore issuers taking supply to four times what it was in the first two weeks of last year’s record six month run. But even more impressive is the appetite for yield, exemplified by Trade and Development Bank of Mongolia’s debut in the currency, which despite modest size signals the extent to which dim sum boasts a thriving high yield segment absent in any other Asian currency bond market, writes Steve Gilmore.

The China Securities Regulatory Commission is up to its old tricks again, intervening to postpone IPOs that had been poised to list on the Shenzhen Stock Exchange. The CSRC’s actions suggest that it is not yet ready to give up control. Issuers might have to wait a little longer for a fully market-oriented China IPO market.

The Shanghai Clearing House (SCH) has cleared its first renminbi interest rate swap, a deal between Industrial and Commercial Bank of China (ICBC) and the Shanghai Pudong Development Bank (SPDB), writes Dan O’Leary of Derivatives Week (DW).

Chinese authorities intend to allow the use of cross border renminbi derivatives for hedging purposes by financial institutions operating in the Shanghai free trade zone, according to market officials.