China

Chinese President Hu Jintao visited Hong Kong last week, sparking hopes among offshore renminbi market participants that they would hear a raft of specific measures that could help the market grow. They were left disappointed, but that may be for the best. So far the pace of reform has been dangerously fast. A little pause for breath would be no bad thing lest investors and issuers start to suffer from growing pains.

Steelmaker Yieh Phui Enterprises raised Rmb275m ($43.3m) from its first foray into the offshore renminbi bond market, but despite scarce supply from Taiwanese issuers in the market the company raises less than many bankers and investors had expected.

United Overseas Bank sold a S$1.2bn ($949.83m) tier two deal this week, and bankers hope the strong response to the deal will encourage more Asian banks to sell subordinated debt in the Singapore dollar market.

Companies from Taiwan will only increase their usage of Hong Kong’s dim sum bond market if Taipei allows its domestic banks to conduct renminbi business, believe analysts.

Treasurers are advised to place their ‘fluctuating cash’ in money market funds as these ‘AAA’-rated instruments offer diversification, liquidity and higher returns amid increased market volatility, says HSBC.

The Laos central bank has appointed ICBC as a clearing bank for renminbi, putting the country ahead of London and other potential offshore centres which must clear the currency through Hong Kong.

China’s new creation of a special economic zone in Qianhai is expected to boost the offshore renminbi market, increasing dim sum bond yields and money market rates, says the French bank.

Philippine investment bank First Metro Investment Corp plans to sell up to Ps7bn ($165.6m) of peso bonds in July, making its second offering in the domestic debt market in less than a year.

Malaysian banks will step up their domestic bond issuance in the second half of the year, helping them fund planned acquisitions, both in the country and offshore.

The chairman of Hong Kong Exchanges and Clearing thinks China’s Ministry of Finance should list bonds on his bourse. He is correct – and others should do so too, to foster market transparency.

The 15th anniversary of the handover of Hong Kong to China will include a series of measures to boost offshore renminbi, marking the next stage in the development of the CNH market, say analysts.