Latest RMB People & Markets news
Details around the Bond Connect are still trickling in just a week from the expected July 3 launch, with some analysts raising the spectre of a last minute U-turn by PBoC on its decision not to have aggregate quotas over the scheme.
Tradeweb becomes Bond Connect’s first foreign trading platform provider, both northbound and southbound fund flows of the Mutual Recognition of Funds scheme pick up speed in May, and the State Administration of Foreign Exchange (Safe) plans favourable FX policy for Chinese companies investing in Belt and Road projects abroad.
RMB round-up: PBoC says Chinese banks must compete globally, CSRC promises reform after MSCI inclusion, HKEX plans CNH, USD futures launch on July 10
The governor of People’s Bank of China says Chinese banks must face international competition, the China Securities Regulatory Commission (CSRC) considers changes in Stock Connect daily trading quotas after MSCI’s A-share inclusion, and the Hong Kong Exchange plans to launch CNH and dollar gold futures on July 10.
China's Ministry of Finance completed its first semi-annual auction of the year of offshore renminbi (CNH) bonds on Thursday, in a deal that surprised analysts with the strength of its demand.
The Luxembourg Stock Exchange (LuxSE) signed an agreement this week with the Shanghai Stock Exchange (SSE) for a green bond index, the latest move by China to boost its green credentials and entice international investors. Morgan Davis reports.
Foreign investors using the Bond Connect will not be required to exchange their renminbi back to foreign currencies even after selling their bonds, if they intend to re-invest that money in onshore Chinese bonds, according to new interim rules for Bond Connect published by PBoC on June 21.
The upcoming Bond Connect will not only further open up China’s fixed income market, but also speed up the country’s financial market reform, Mark Austen, CEO of Asia Securities Industry & Financial Markets Association (Asifma), told GlobalRMB in a wide-ranging interview.
The MSCI's decision to include A-shares in its emerging market index will drive capital inflows to Chinese equities not just from index trackers but also from active fund managers. But some warn that the pace of investments could be threatened by shrinking offshore RMB (CNH) liquidity.
China may have got its second big win on the global stage, after the inclusion of the RMB in the SDR, on Wednesday when MSCI decided to add A-shares to its emerging markets index, but that does not mean the authorities can now rest on the laurels. The small weighting given to A-shares by MSCI is just one indication of how much China still has to do to upgrade its capital markets.
Chinese bonds seem just one step away from full inclusion by the major bond index providers, following partial inclusions by Bloomberg-Barclays and Citi in the first quarter. But while some experts believe the wait will be over after the launch of the Bond Connect, others worry that China’s recent efforts to keep the renminbi stable will hurt its chances.
MSCI opened the door to A-shares in a landmark moment for China's reform and renminbi internationalisation agenda. Regulators, investors and analysts widely welcomed the decision, with many underlining that while initial impact of the inclusion may be limited, the first step has been taken to a rebalancing of global portfolios towards RMB assets.
Index provider MSCI decided it was time to include A-shares in its emerging markets index, making the announcement just before 5am Hong Kong time on June 21. Chinese onshore stocks will make up 0.73% of the MSCI Emerging Markets index starting May 2018.
The fate of Chinese A-shares in the MSCI emerging market index will be known on June 21 at about 4.30am Hong Kong time. While the likelihood of inclusion has gone up after MSCI’s latest consultation paper from March, experts are not expecting sizable capital inflows into Chinese equities to follow.
The Bond Connect will likely make its debut on July 3, Tae Yoo, head of client business development at the Hong Kong Exchange, told an industry event on Tuesday. While a full blueprint for the scheme is yet to be provided, what is clear is that Bond Connect investors will not have access to the onshore hedging market.
The Luxembourg Stock Exchange (LuxSE) has signed an agreement with the Shanghai Stock Exchange (SSE) to launch a green bond index that will provide synchronous quotes in China and Europe.
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GlobalRMB Panda Bonds league table
|Rank||Arranger||Share % by Volume|
|2||China Merchants Bank Co||22.73|
|3||China CITIC Bank Corp||19.23|
|4||Industrial and Commercial Bank of China (ICBC)||8.74|
|4||Bank of China (BOC)||8.74|
Panda Bond Database
|Pricing Date||Issuer||Country||Size Rmb (m)|
|1||12-Jun-17||China Traditional Chinese Medicine Holdings||China||2,000|
|2||22-May-17||CITIC Bank International||China||3,000|
|3||19-May-17||China Power New Energy Development Co||China||800|
|5||25-Apr-17||CAR Inc||Hong Kong||300|
Offshore RMB Bond Top Bookrunners
|Rank||Bookrunner||Share % by Volume|
|2||Bank of China (BOC)||10.06|
Latest Offshore RMB Bonds
|Pricing Date||Issuer||Country||Size Rmb (m)|
|1||01-Jun-17||Ocean Wealth (Parent: China Orient Asset Management)||China||632|
|2||11-Apr-17||Bank of China Johannesburg Branch (BOC Johannesburg)||China||1,500|
|3||22-Feb-17||Ocean Wealth (Parent: China Orient Asset Management)||China||850|
|5||04-Nov-16||China Nuclear Engineering Group||China||1,500|