Greater China

Eagle High Properties, a property arm of Indonesian conglomerate Rajawali Group, has mandated banks to sell a Singapore dollar-denominated bond as the market allows for smaller deal sizes than US dollars.

The bank is now expecting the renminbi to be stronger by year end as the country reports an improved economic outlook and pushes ahead with the currency’s internationalisation.

Nicolas Mackel, CEO for Luxembourg for Finance, says the country is better-positioned to be Europe’s offshore renminbi centre than other cities vying for the title - and anticipates it will get an RMB clearing bank by 2014.

The offshore renminbi bond market remains both opportunistic and strategic for many dim sum issuers, but the small sizes, shorter tenors and repatriation issues constrict the market’s growth.

Offshore renminbi hubs must cooperate to promote liquidity and instil confidence in the renminbi while Beijing continues to strictly control currency flows, says the Monetary Authority of Singapore and corporate treasurers.

Top 3 Offshore RMB DCM Transactions - 2013 YTD

In this week’s round up of offshore renminbi news, Singapore’ growing renminbi deposits, China’s central bank may be nearer to widening the USD-CNY trading band, and Kenya aims to be Africa’s first offshore renminbi hub.

Africa is a key geography for Chinese trade and political relations - and it will become an increasingly important part of Beijing’s bid to internationalise the renminbi. It’s about time one of the region’s countries takes a lead.

China is finally allowing company treasurers to conduct one-way renminbi sweeping. But if the country wants real clout as a financial centre, regulators need to promote two-way flows.

CNH high yield bond issuers have had a turbulent ride in the secondary market, even losing their pricing advantage over their peers in the US dollar market. This will change only when liquidity improves.