China

Bankers and analysts said on Wednesday that the recent market volatility sparked by fears of a liquidity crunch among China’s banks was making the offshore renminbi market more appealing for issuers — even after a Tuesday statement from the central bank eased conditions a little. But they reckoned any resurgence in deals would probably have to wait until the middle of July.

China’s Ministry of Finance completed its Rmb13 billion dim sum auction on Wednesday, but the country’s ongoing interbank funding upheaval took its toll. Yields were up and demand was down.

In this roundup of offshore renminbi news, Hong Kong launches the CNH Hibor fixing, UK and China’s central banks sign a currency swap agreement, and China’s Ministry of Finance issues its dim sum bond.

Dealogic league tables of Asian local currency bond transactions, dated June 19-26, 2013. Including All Asian (ex Japan) currency bonds, all offshore renminbi bonds, Hong Kong dollar, Korean won, Chinese renminbi, Indian rupee, Taiwanese dollar, Indonesian rupiah, Singapore dollar, Thai baht and Malaysian ringgit.

Asia’s financial markets began to recover from fears of a Chinese liquidity crunch on Wednesday after the People’s Bank of China (PBoC) released a statement on Tuesday saying that it would execute money market operations to stabilise markets and ease the pressure on banks. In response, DCM bankers dared to hope that prospects for dealflow would now improve.

Asian governments with weakening currencies will have to pay up to attract investors to auctions of local assets, analysts have warned.

More offshore renminbi-denominated CDs have been issued in 2013 than in years past as banks prepare for increased trade and investment activity. Yet negative news from China has put issuance on hold.

China’s National Development and Reform Commission may give state-owned companies long-awaited quotas to sell offshore renminbi bonds — once the Ministry of Finance has paved the way.

Chinese retail giant Maoye International Holdings is taking a stab at issuing its first dollar bond, even though volatile bond markets have paralysed issuance since May 22.

Dealogic league tables of Asian local currency bond transactions, dated June 19, 2013. Including All Asian (ex Japan) currency bonds, all offshore renminbi bonds, Hong Kong dollar, Korean won, Chinese renminbi, Indian rupee, Taiwanese dollar, Indonesian rupiah, Singapore dollar, Thai baht and Malaysian ringgit.