China

In this roundup of offshore renminbi news, China launches a renminbi private equity fund, asset managers say the renminbi is still a one-way bet, and BoA-Merrill says the CNH will rise against the dollar.

China-based corporates are looking forward to the development of renminbi-denominated syndicated loans in both the offshore and onshore markets as they look to expand their fundraising options.

Fund managers and dim sum bond issuers agree that the offshore renminbi bond market lacks diversity. Greater variety depends on fostering liquidity, and paying special attention to arbitrage opportunities.

Hong Kong fashion retailer I.T gave investors a welcome break from Chinese property supply in the high yield dim sum market on Wednesday. The small and unrated company punched above its weight and priced a Rmb1bn ($161.5m) five year deal inside some of its rated peers.

Competition between offshore renminbi hubs can greatly benefit RMB internationalisation – but only if cities focus on products and regulation rather than the race to clear renminbi, say experts.

China and Hong Kong’s regulators must move quickly to make sure the dim sum bond market remains dynamic, according to asset managers.

Borrowers interested in issuing dim sum bonds find it challenging to obtain pricing that reflects their true creditworthiness, potentially deterring other well-rated credits to enter the market.

International dim sum issuers are keen to access the market again this year to create a curve, but have raised concerns about the limitations of the swap market.

The CNH bond market has been fairly subdued this year because costs are not as attractive as they once were, deterring corporate treasurers from issuing the instrument, but there are those who are still keen.

A majority of the factors holding back the dim sum market from going global would be solved by a multi-tenor sovereign deal, with Reg-S and 144a documentation, traded around the clock.