Greater China

Demand from international investors to participate in Bond Connect is strong – with Ireland and Luxembourg-registered funds set to be the next group to join in once real-time delivery versus payment is introduced later this year, two bankers told the IFLR Asia Capital Markets Forum on Tuesday.

The Chinese regulators are planning to expand Bond Connect to cover exchange traded bonds, and are mulling changes to older access channels such as the qualified foreign institutional investor (QFII) scheme, according to market participants.

CPI Ronghe Financial Leasing, which launched its first international syndicated loan a couple of months ago, has wrapped up the deal with a dozen banks chipping in.

Two companies from China’s Qingdao city are preparing to head offshore, just one week after a local government financing vehicle (LGFV) from the area bagged a $800m bond.

Tech giant Alibaba Group Holding is taking bids for a five-tranche transaction, putting its focus on the longer end of the curve. Hopes are high for yet another impressive deal from the Chinese firm, which last stunned the market in 2014 with the largest G3 bond on record from Asia ex-Japan.

China Construction Bank Corp and Bank of Communications Co snapped up investors on Monday when they offered up multiple tranches of floating rate dollar bonds through their Hong Kong branches.

Foreign ownership reform in the Chinese financial sector is not only a landmark in the country’s opening up, but also a strategic move to rebalance US-China trade. But recent guidelines curtailing banking sector liberalisation appear to be a case of one step forward, two steps back for China. Now more than ever, Beijing must not let its caution around financial risk take over and undo its strategy.

The sheer amount of dollar bond issuance seen this month in Asia, and the expected supply heading into the year end, has taken a bit of a toll on the market, with a handful of deals pulled and many others suffering in secondary. But there is a silver lining. Issuers in the region are being forced to think hard, communicate better and push the boundaries — things which can only make the market stronger.

Chinese financial services provider Far East Horizon priced a subordinated perpetual bond on Monday, grabbing an open issuance window ahead of heavy expected supply. Its deal came with a rather unique structure to qualify for equity credit from the rating agencies.

Beijing Capital (Hong Kong) is back in the loan market after a gap of more than one year for a HK$2bn ($256m) fundraising.

Financial market participants will need to embrace the rise of new technology to survive the transition to a post-cash society, an area where China is taking the lead, Andi Dervishi, CIO and global head of fintech, e-payments and new finance at International Finance Corp (IFC), told a conference in Hangzhou.

Chinese issuers are yet again dominating the supply in Asia ex-Japan debt markets, with four firms wooing dollar and euro bond investors on Tuesday.