Foreign investors face limitations on hedging and lending against their renminbi holdings at a time when their renminbi holdings are growing and the Chinese currency has depreciated.
Some key issues need clarifying before foreign money will flow into onshore renminbi bonds, say bankers from Credit Suisse, Goldman Sachs and Natixis.
Amid the drama of China's attempts at managed depreciation of the renminbi, other Asian currencies are also expected to slide against the dollar this year – except India's.
In allowing its currency to be subject to so much speculation, Beijing risks investors losing faith in mainland assets, says Julius Baer's Asia head of research.
Despite the broad exodus from emerging market debt, offshore renminbi bonds have attracted flows and are expected to continue to benefit from renewed investor interest.
Hong Kong's central bank hopes that partnering Clearstream will help to reignite interest in its repurchase agreement settlement platform. To date very few deals have been closed.
SSgA gains approval to allow MPF scheme providers to invest in its gold-backed ETF, just as the price of bullion sinks. Also, Invesco launches a CNH bond fund for its MPF platform.
Issuance of offshore renminbi bonds more than doubled month-on-month in November, backed by currency appreciation. With China’s economy forecast to strengthen, this could run on.
The firm is looking to pair offshore bonds with onshore securities with a view to giving Hong Kong pension savers access to the asset class, when regulations permit.
With an RMB clearing bank about to be established in Taiwan, industry players reflect on the potential opportunities and how they believe the market will grow.
Boasting a broader array of issuers based on credit fundamentals not just FX appreciation, the $25 billion offshore RMB bond market is catching the eye of insurers, among others.
Principal Global Investors names its first regional COO, as it seeks to tap asset-management opportunities in Chinese securities.