China

The Chinese government needs to encourage the use of renminbi for payments by other Asian countries if it wants the currency to reach the same level of internationalisation of the Japanese yen, says SWIFT.

Favourable basis swaps for borrowers who want to swap renminbi into US dollars is attracting new borrowers to the dim sum markets, investment banking debt specialists tell Asiamoney PLUS.

Top 3 Offshore RMB DCM Transactions - 2012 YTD

Cheung Kong Infrastructure issued a $300m hybrid bond at the end of last week, closing the deal a week after it had been delayed by a listing hiccup with the Luxembourg Stock Exchange.

Dim sum bond issuers from the likes of the Middle East, Europe, North Asia and Latin America are helping to internationalise Hong Kong’s CNH debt market – which is a welcome development.

DBS Bank and Swire Pacific launched deals in the international bond market on Tuesday, joining a number of issuers that have taken advantage of the surge in demand for Asian credits since the start of the year.

Dubai bank Emirates NDB looks set to become the first Middle Eastern company to tap the offshore renminbi market, after lining up meetings with investors this week.

The dim sum bond base is expected to hit Rmb400 billion (US$64 billion) this year due to favourable market fundamentals.

With the country’s economy showing signs of losing momentum, Beijing is encouraging banks to lend more to the corporate world. It should place more emphasis on further developing its equity and bond markets. Daniel Flatt reports.

Beijing has long allowed its currency to appreciate in a measured fashion, through heavy capital controls. But a combination of local economic uncertainty and the US dollar’s popularity means the currency’s appreciation is nearing an end, reports Chris Wright.

Top 3 Offshore RMB DCM Transactions - 2012 YTD