Greater China

It has only been underway for one year, but the Chinese auto ABS market has already raced ahead with volumes surging. A new deal from SAIC-GMAC Automotive Finance has now appeared with the company looking to securitize Rmb3bn ($469m) worth of auto loans next month.

Westpac has hired a former banker from Royal Bank of Scotland to bolster its Hong Kong-based debt capital markets business.

The turbulence in China’s equity and currency markets has led to some doubts about the continuing internationalisation of the renminbi. But China’s regulators are not having second thoughts and have released new guidance supporting the “One Belt One Road” (OBOR) scheme.

Individual initiatives by China in the commodity space, such as the July launches in Shanghai of a Gold Connect scheme and a new oil and natural gas exchange, may be gaining little traction right off the bat, but they are pieces in a broader strategy devised by the world's largest consumer of commodities. An upcoming oil futures contract, in particular, could see that plan make a leap forward.

China's Yingde Gases Group is tapping the offshore syndicated loan market for a $150m deal. The firm, which earns revenues in renminbi and serves customers in the iron and steel industry, is offering lenders generous returns.

Short CNY swaps have been aggressively offered on the back of the PBoC's monetary easing move and the 1s/5s curve has steepened accordingly. Despite this equities have not rebounded and there has been receiving interest in 5-year swaps on the weak longer-term economic outlook, writes Deirdre Yeung of Total Derivatives.

As the dust settles on two days of equity market madness, it’s worth recognising that what happens in the Chinese stock market shouldn’t mean much for other emerging markets.

Whatever the wisdom of tailoring monetary policy to the gyrations of the global equity markets, the Fed’s likely caution could clear the way for a wall of FIG supply once calm returns.

The Chinese equity sell-off is extending despite a massive injection of funds by the PBoC. Short swaps have been well bid on capital outflow concerns while the mid-sector is offered on the weak economic outlook. Looking forward sources expect the very flat curve to limit short-end paying in the near-term, writes Deirdre Yeung of Total Derivatives.

Investors are firmly back in risk-of mode this week as global stock markets take a battering. This is likely to put new issuance on hold for the rest of the month and the outlook for September also looks uncertain, say bankers.

A depreciating renminbi, depressed commodity prices and tumbling stock markets have made it hard for high yield issuers to access international capital markets recently. But financing needs remain, and the gaps can only be plugged if DCM bankers take a more inspired approach to deals.

Green bond issuance in Asia has taken off this year after sluggish growth in the past, according to data by Dealogic.