China
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China Longyuan Power Corp has launched a Rmb1.7bn ($278m) three year offshore renminbi loan into general syndication.
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China has recovered from the June liquidity crunch, yet macroeconomic factors could exacerbate the country’s monetary problems. This may lead the central bank to cut the reserve requirement ratio in six months’ time.
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Global bond issuers and investors crave larger and longer-dated dim sum debt, but China’s SOEs have been slow to lead the way. Aspiring offshore RMB hubs should take the matter into their own hands.
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In this week’s roundup of offshore renminbi news, Hong Kong regulators seek new CNY conversion quotas, renminbi-denominated payments are on the decline, and foreign banks are slow to enter Shanghai’s free trade zone.
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Singapore financial officials are calling on Beijing to liberalise its rules on corporates’ ability to repatriate renminbi back into China – a move that will also help the city state in its bid to be an offshore renminbi hub.
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Offshore renminbi bonds offered positive returns last month and this momentum is likely to persist, particularly on high yield paper, to offer a full-year total return of between 5% and 7%, says HSBC.
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In light of the US Federal Reserve’s looming plans to taper its quantitative easing programme, institutional investors and fund managers have become keener to buy and trade offshore renminbi credits.