This week in renminbi: June 19, 2017

China Securities Regulatory Commission welcomes the prospect of A-share inclusion by MSCI, China’s State Council publishes a new negative list to make foreign investment easier in free trade zones, and the Asian Infrastructure Investment Bank (AIIB) makes its first equity investment.

  • By Noah Sin
  • 19 Jun 2017
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FX:

  • People’s Bank of China's renminbi fix against the dollar was set at 6.7972 on Monday morning, 23bp stronger from Friday. In the spot market, the CNY was trading at 6.8122 as of 1:15pm, with the CNH at 6.8114, up 0.02% and 0.04% from their previous close respectively, according to Wind data.
  • The dollar index was trading at 97.17 at the same time, up 0.03% from the previous close, according to Wind. The Thomson Reuters CNY reference index closed at 94.00 on Sunday, down 0.19% from its previous close.
  • The trade-weighted index by CFETS closed at 94.24 on June 16, up 0.16% from the previous week, with the BIS basket and special drawing rights basket at 94.22 and 94.76, up 0.24% and 0.19%, respectively.

Regulators:

  • The CSRC has welcomed the prospect of A-share inclusion by MSCI this week, a spokesperson said on June 16, arguing that no emerging market index will be complete without the presence of Chinese stocks. However, the spokesperson also made clear that China will not accommodate the index provider for the sake of A-share inclusion.
  • “Whether or not A-share will be included, the course of reform of China’s capital markets, towards marketization, the rule of law and internationalisation, will be not be altered,” said the spokesperson. “The pace of reform and opening up will not change because of A-share inclusion.”

FTZs:

Payment:

Trade:

Belt and Road:

  • The MofCom also noted that China invested $4.99bn in 45 One Belt One Road (OBOR) countries between January and May, which made up 14.4% of all of China’s ODI in the same period.
  • The AIIB approved its first equity investment on June 15, according to an announcement by the development bank. A $150m investment will go to the India Infrastructure Fund, which aims to support mid-cap infrastructure companies in India.
  • Separately, the AIIB approved $114m of loans for a road building project in Georgia and $60m of loans for a hydropower plant regeneration project in Tajikistan on June 15.
  • The Export-Import Bank of China’s outstanding loans for OBOR-related projects exceeded Rmb620bn ($91.18bn) at the end of Q1, according to a June 15 report by Xinhua. The policy bank said the loans were used to fund over 1,200 projects.
  • The first major energy project in the China-Pakistan Economic Corridor was put into operation in May, according to a June 14 announcement by Industrial and Commercial Bank of China. The bank led the financing for Pakistan’s Sahiwal Coal-Fired Power Station, arranging a syndicated loan of $1.44bn for the project. The total investment to the project stood at $1.8bn.

Hubs:

  • Norman Chan, chief executive of the Hong Kong Monterey Authority (HKMA), has said that Hong Kong is unlikely to switch its currency peg with the dollar for a peg with the renminbi, according to a June 19 Chinese media report.
  • Chan said that the dollar peg has worked effectively for the past 30 years, and that Hong Kong will only consider a peg with the renminbi when it fulfils several conditions, including full convertibility, full liberalisation of China’s capital account with no capital controls, a financial market deep and wide enough for Hong Kong’s FX fund to hold assets to support the city’s monetary base, and synchronized economic cycles between the two markets.

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  • By Noah Sin
  • 19 Jun 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 28.15
2 CITIC Securities 21.52
3 China CITIC Bank Corp 9.93
4 China Merchants Bank Co 9.38
5 Industrial and Commercial Bank of China (ICBC) 7.73

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 13-Oct-17 Global Logistic Properties Singapore 1,000
2 19-Sep-17 Skyworth Digital Holdings China 2,000
3 14-Sep-17 Bank of China (Hong Kong) (BOCHK) China 9,000
4 05-Sep-17 Joy City China 1,000
5 01-Sep-17 Rusal Russian Federation 500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 37.58
2 JP Morgan 18.57
3 HSBC 16.29
4 Credit Agricole 12.53
5 Barclays 3.76

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 19-Oct-17 Commonwealth Bank of Australia (CBA) Australia 1,500
2 11-Oct-17 BMW Finance NV The Netherlands 1,000
3 11-Oct-17 BOC Aviation Singapore 1,000
4 28-Sep-17 National Bank of Canada Canada 600
5 22-Sep-17 Royal Bank of Canada Canada 900