DBS expects offshore RMB bond issuance to reach nearly 350 billion yuan

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With renminbi-denominated products gaining more investor interest, DBS said it expects total offshore renminbi (RMB) bond issuance in the region to reach almost 350 billion yuan this year.

According to DBS, there have been 107 billion yuan worth of RMB bonds issued in the region so far in 2014, and this is already about 40 per cent of the total last year.

DBS said offshore RMB bond issuance will remain buoyant for a couple of factors.

Firstly, the domestic cash crunch in China means onshore funding liquidity is expected to remain tight.

Secondly, the Chinese central bank (People’s Bank of China) has said that it plans to expand the yuan’s trading band in an orderly manner this year to make the currency more convertible and to support a growing role in trade finance and forex trading.

However, DBS also said there are a couple of impediments that might hinder the further development of the offshore RMB bond market.

Clifford Lee, head of fixed income at DBS Bank, said: “One of the bigger impediments to the more rapid growth of the market is the use of the RMB. The application to utilise the RMB and the greatest pool of requirement still continues to be onshore in China.

“There are still strict guidelines which govern the repatriation of such offshore RMB onshore, and any continued relaxation there will be welcomed by the market.”

As for Singapore’s role in the offshore RMB bond market, experts said Singapore is in a good position to reach out to regions outside of Greater China, namely Southeast Asia, in order to pull in new issuers and investors and increase participation in the offshore RMB market.

 

 

 

Source : Channel News Asia | March 12, 2014

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Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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