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Tuesday, 24 October 2017

Renminbi Capital Markets 2015

A special report with IFR Asia magazine 894 (May 23 2015)

Rising to the challenge

Renminbi Capital Markets: Rising to the challenge

IFR Asia - Renminbi Capital Markets 2015

Hype is returning to the renminbi capital markets. After a few lacklustre years for Chinese equities, Shanghai and Hong Kong are on their biggest bull runs in years, while interest rate cuts have lifted interest in renminbi bonds.

Snow clearing vehicles work on a road in Harbin, Heilongjiang province.

Two-way traffic

IFR Asia - Renminbi Capital Markets 2015

The renminbi’s overseas push may have taken a back seat to China’s monetary easing, but the currency’s global importance can only grow in the years to come.

An employee works on a final assembly line at China CNR’s Tangshan Railway Vehicle’s factory in Hebei province.

On the right track

IFR Asia - Renminbi Capital Markets 2015

A landmark trading link between Shanghai and Hong Kong has taken longer than expected to build momentum, but rising trading volumes are enhancing its significance as a template for China’s liberalisation.

A paramilitary policeman attends a training session at a military base in Suining, Sichuan province.

Test of resolve

IFR Asia - Renminbi Capital Markets 2015

China’s reforms promise to improve risk pricing and end a long history of government bailouts, but slowing growth and rising defaults are testing the resolve of the country’s regulators.

A bus drives past two policemen at the main Nathan Road after normal traffic resumed, at Mongkok shopping district in Hong Kong.

Patience required

IFR Asia - Renminbi Capital Markets 2015

After unfavourable foreign-exchange moves and plunging offshore liquidity silenced the Dim Sum bond market at the start of 2015, signs of a revival are beginning to build.

Followers surround a boat before a traditional burning ceremony in Pingtung county, southern Taiwan.

Formosa frenzy

IFR Asia - Renminbi Capital Markets 2015

Taiwan has emerged as a hotspot for overseas renminbi fundraising, drawing international issuers to an enthusiastic investor base. Although the market lacks the clout of Hong Kong or Singapore, it is becoming a growing rival to the larger hubs.

Cleaners prepare for window cleaning outside the 101st floor of the Shanghai World Financial Center.

Don’t look down!

IFR Asia - Renminbi Capital Markets 2015

The recent rally in A-share valuations has been remarkable even for China’s notoriously volatile mainland bourses. The last boom-bust cycle led to a freeze on IPOs, as well as sweeping reforms. Can investors avoid another all-too predictable correction?

6-year-old male panda Weiwei grabs the bars to its cage at a zoo in Wuhan, Hubei province.

Caged potential

IFR Asia - Renminbi Capital Markets 2015

With yields onshore renminbi bonds lower than those on their offshore equivalents for the first time, foreign issuers should be keen to take advantage of onshore liquidity to reduce funding costs, but red tape remains a powerful obstacle.