China

Hong Kong will be the first beneficiary of Wenzhou’s new pilot programme, which allows the Chinese city’s investors to access overseas financial assets, believes the bank.

The size of the renminbi asset pool in Hong Kong is set to rise as the currency is used more for trade settlement and Chinese companies look to hedge their exposure, says Nomura.

Hong Kong’s financial services and the treasury secretary K.C. Chan says that a larger renminbi qualified foreign institutional investors (RQFII) quota is necessary to support the internationalisation of the offshore renminbi (CNH).

Korea National Oil Corp issued a $1bn five year note this week, closing the deal inside its secondary curve.

HSBC head of debt capital markets Stephen Williams says bond sales momentum will slow in Q2 as spreads tighten and frequent borrowers step back from the market.

Chailease Finance launched its debut transaction in the dim sum bond market on Tuesday, becoming the first issuer from Taiwan to launch an offshore renminbi deal this year. French bank Société Générale is also planning to add to the selection of the credits in the market, and is now plotting its own deal.

Price disparity between the offshore and onshore renminbi will continue but should close as Hong Kong and China’s financial systems integrate, says the Hong Kong Monetary Authority (HKMA).

Ayala Land, the biggest developer in the Philippines, is approaching bond investors in its local market for as much as Ps15bn ($349m) of funding. The company is now pitching the deal to institutional accounts, but could soon bring in retail investors to help it exercise a greenshoe.

The expectation that the offshore renminbi will depreciate could well spark company demand for loans in the currency, says Barclays.

An internationalised renminbi and open Chinese capital account is poised to marginalise Hong Kong’s clout as a financial hub and offshore currency centre. The city must leverage its position while it can.

Fluctuations in China’s currency should not be treated with apprehension but welcomed as a sign of the renminbi’s growing maturity.