The Chinese government contemplates RMB-denominated IPOs for mainland companies fundraising for Belt and Road projects, foreign ownership of Chinese bonds goes up in December, and premier Li Keqiang indicates the economy will grow by 6.9% in 2018.
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Belt and Road:
- China is considering allowing mainland companies participating in the Belt and Road Initiative (BRI) to raise funds from RMB-denominated IPOs in Hong Kong, Zhang Xiaoqiang, vice-chairman of the China Center for International Economic Exchanges, was cited by a January 10 state media report as saying.
“Through such attempts, the government hopes Hong Kong would be able to play a greater role in facilitating the [Belt and Road] initiative on the investment front and further promoting the internationalisation of the renminbi,” he said.
- China and France agreed to co-operate more closely on the BRI during French president Emmanuel Macron’s visit to China this week, a spokesperson for the Chinese Ministry of Commerce told a January 11 press conference. The two countries also agreed to set up the Council of China-France Entrepreneurs and signed $20bn worth of deals covering a range of industries, including aviation, energy and finance.
- International investors increased their stake in China’s interbank bond market last December, according to data published by China Central Depository and Clearing (CCDC) and Shanghai Clearing House (SCH).
Foreign investors held Rmb974.1bn of onshore bonds at CCDC, which clears government bonds, by the end of 2017, up 25.08% year-on-year. Some Rmb173.2bn of bonds at SCH
wereheld by offshore investors in the same period, up from Rmb20.9bn in December 2016.
- Chinese GDP growth will be around 6.9% in 2018, China’s premier Li Keqiangsaid in January 11 speech. It was the first indication from the Chinese government on the country’s likely growth rate this year.
- The trading volume for USDCNH futures was $190.2bn in 2017, up from $51.4bn in 2016, according to figures released by the Singapore Exchange. This performance gave the Singapore-listed product a market share of 75.5% in the USDCNH futures market, up from around 50% at the start of 2017.
The product also recorded its largest end-of-month open interest – 25,697 contracts – in December, up 29% month-on-month and almost 42% year-on-year, said the exchange.
- The People’s Bank of China has renewed its bilateral local currency swap line with the Bank of Thailand, with the size of the swap line staying at Rmb70bn, according to a January 9 statement by the PBoC. The renewed agreement will last for three years.
- Bank Indonesia has opened a representative office in Beijing, according to a January 12 announcement by the PBoC. The new office, which is the ninth office set up by a foreign central bank in China, will help promote economic and trade relations between the two countries, said the PBoC.
- Foreign banks’ branches in the free trade zones (FTZs) will no longer have to wait for a year before offering RMB services, according to a January 9 State Council announcement. The change formed part of China’s relaxation in foreign investor restrictions in the FTZs across various sectors, from entertainment to internet and transportation.
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Latest news by market and league table performance
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GlobalRMB Panda Bonds league table
|Rank||Arranger||Share % by Volume|
|1||Bank of China (BOC)||28.62|
|3||China CITIC Bank Corp||9.72|
|4||China Merchants Bank Co||9.18|
|5||Industrial and Commercial Bank of China (ICBC)||7.56|
Panda Bond Database
|Pricing Date||Issuer||Country||Size Rmb (m)|
|1||22-Nov-17||Province of British Columbia||Canada||1,000|
|3||13-Oct-17||Global Logistic Properties via Iowa China Offshore Holdings||Hong Kong||1,000|
|4||19-Sep-17||Skyworth Digital Holdings||China||2,000|
|5||14-Sep-17||Bank of China (Hong Kong) (BOCHK)||China||9,000|
Offshore RMB Bond Top Bookrunners
|Rank||Bookrunner||Share % by Volume|
|1||Standard Chartered Bank||31.63|
Latest Offshore RMB Bonds
|Pricing Date||Issuer||Country||Size Rmb (m)|
|2||30-Nov-17||Ministry of Finance of the People’s Republic of China (MoF)||China||7,000|
|3||15-Nov-17||Bank of China Paris Branch (BOC Paris)||China||1,000|
|4||02-Nov-17||Hitachi Capital (UK)||United Kingdom||500|
|5||27-Oct-17||Korea Development Bank (KDB)||South Korea||1,400|