China

Malaysia is expected to continue to enjoy its status as the global hub for sukuk bonds this year, as domestic and foreign issuers are lured by the country’s lower interest rates and large pool of liquidity.

Eventually the offshore renminbi bond market will have to contend with an unwelcome development: a bond default. Lawyers explain to Asiamoney PLUS what they think would happen when that occurs.

The recent cut in China’s reserve requirement ratio looks like bad news for the offshore renminbi market, pushing down funding costs at home at a time when the dim sum market is looking less and less attractive. But there are reasons to be optimistic about the future of the offshore renminbi debt market.

Ezion Holdings made its debut in the Singapore dollar bond market on Tuesday, selling a S$100m ($79m) deal at the tight end of price guidance. It was the company’s first issue from a S$500m MTN programme — and funding officials are now eyeing the US dollar market for their next issue.

There have been around $4.79bn of offshore renminbi bonds sold this year, including more than $2bn from issuers outside of Hong Kong and China, the usual drivers of supply. Read on for the full league tables.

The US financial centre would be an ideal offshore renminbi hub, but bellicose political rhetoric against China means it will be unable to take advantage of this opportunity for a long time to come.

The region’s local currency bonds will be a haven from a turbulent future for emerging markets and the CNH market should thrive going forward, according to Pictet Asset Management.

Selected Chinese corporates will be allowed to tap renminbi liquidity in Hong Kong via the loan market. Remittance is permitted and the programme could be expanded to other provinces.

Some observers consider the central government’s plan to develop the local municipal bond market as an alternative funding source to be positive, but sceptics believe it is bank financing by another name.

Philippine conglomerate SM Investments Corp has started marketing the sale of up to Ps15bn ($351m) of retail bonds to domestic investors, its second offering in the local market in the last nine months.

Chinese telecommunications equipment company Huawei Technologies debuted in the offshore renminbi bond market late last week, raising Rmb1bn ($158m) through a private placement.