China

New guidelines will improve straight-through-processing for offshore renminbi.

South Korea’s Hana Bank raised Bt10bn ($324.8m) in Thailand’s local bond market at the end of last week, moving closer to achieving its plan of raising more than $2bn from offshore markets this year.

China has long taken heat for the slow development of its financial services industry. But the progress it has made in the early weeks of 2012 may be enough to silence critics – if it keeps up its momentum.

Offshore renminbi liquidity is expected to stay tight despite the monetary authority’s relaxation on the amount of liquefiable assets held in the currency by Hong Kong banks, said Crédit Agricole.

Top 3 Offshore RMB DCM Transactions - Last Year Rolling (Feb 8 2011 to Feb 7 2012)

The Chinese renminbi does not appear to be heavily undervalued or appreciating too slowly when compared to other emerging currencies, says Baring Asset Management.

The full convertibility of the Chinese currency is unlikely to occur within the next five years unless China adopts a free market approach to controlling its economy, say analysts.

Asian corporates will increasingly turn to domestic bond markets and dim sum offerings to meet their funding needs this year due to the tighter liquidity offshore, though US dollar funding will remain a key tool for larger borrowers, say analysts.

South Korean retailer Lotte Shopping raised Rmb750m ($119m) from a five year dim sum bond last week, becoming the first issuer from the country to tap the offshore renminbi market this year.

Carlos Garcia Moreno, chief financial officer of América Móvil, talks to EuroWeek Asia about the company’s recent experience in the offshore renminbi market.