ID :
202030
Thu, 08/18/2011 - 07:00
Auther :
Shortlink :
http://m.oananews.org//node/202030
The shortlink copeid
Chinese vice premier boosts yuan bond market in HK
HONG KONG, Aug. 18 (Yonhap) -- Chinese Vice Premier Li Keqiang's Hong Kong visit this week has boosted the yuan bond market in the city, after he endorsed the special role of the Chinese territory as an international financial hub, analysts said Thursday.
China has been pushing Hong Kong as an offshore trading hub for the yuan. The country's development policy blueprint for the 2011-2015 period includes measures to strengthen Hong Kong's role as an international financial center.
Li, who has been widely touted as a possible successor to Premier Wen Jiabao in 2013 for a ten-year term, promised China's continued support for the development of Hong Kong as the offshore yuan bond market, during his three-day visit that started on Tuesday.
He also indicated that mainland Chinese companies will issue so-called dimsum bonds, which are denominated in yuan and issued in Hong Kong.
"Mainland Chinese companies have gotten an official green light to issue offshore yuan bonds," said Donna Kwok, an economist at HSBC.
"Previously, they were never banned from applying for permission in theory, but there was no clear channel for them to remit funds and it never happened. Now, there is clarity on the matter and it is a signal for them to go ahead. Li Keqiang's visit and the measures he announced were symbolic and showed unequivocal support for Hong Kong."
Li also said that China will expand the issuance of government debts in the Chinese currency.
"Issuing yuan government bonds in Hong Kong will be a long-term institutional arrangement of the (Chinese) central government," he said.
"We will gradually increase the size of issuance and work for the development and improvement of the yuan-based bond market in Hong Kong."
The vice premier attended an auction ceremony on Wednesday for the sale of 20 billion yuan (US$3.1 billion) in bonds issued by the Chinese government.
It was the third time for China to issue yuan government bonds in Hong Kong. China sold its first sovereign bonds in Hong Kong in September 2009, raising 6 billion yuan. It was also the first time the ministry had introduced a benchmark seven-year tenor to institutional investors. Seven years is a key maturity in the onshore government bond funding curve.
"We think the introduction of the seven-year tenor in the offshore market not only will fill the demand for the duration in this sector in the offshore market but will also help align the Chinese Finance Ministry's liability profile both in the offshore and onshore markets," said Deutsche Bank in a report.
The Wednesday auction attracted high investor interest, garnering 69 billion yuan worth of bids within one hour.
China has been pushing Hong Kong as an offshore trading hub for the yuan. The country's development policy blueprint for the 2011-2015 period includes measures to strengthen Hong Kong's role as an international financial center.
Li, who has been widely touted as a possible successor to Premier Wen Jiabao in 2013 for a ten-year term, promised China's continued support for the development of Hong Kong as the offshore yuan bond market, during his three-day visit that started on Tuesday.
He also indicated that mainland Chinese companies will issue so-called dimsum bonds, which are denominated in yuan and issued in Hong Kong.
"Mainland Chinese companies have gotten an official green light to issue offshore yuan bonds," said Donna Kwok, an economist at HSBC.
"Previously, they were never banned from applying for permission in theory, but there was no clear channel for them to remit funds and it never happened. Now, there is clarity on the matter and it is a signal for them to go ahead. Li Keqiang's visit and the measures he announced were symbolic and showed unequivocal support for Hong Kong."
Li also said that China will expand the issuance of government debts in the Chinese currency.
"Issuing yuan government bonds in Hong Kong will be a long-term institutional arrangement of the (Chinese) central government," he said.
"We will gradually increase the size of issuance and work for the development and improvement of the yuan-based bond market in Hong Kong."
The vice premier attended an auction ceremony on Wednesday for the sale of 20 billion yuan (US$3.1 billion) in bonds issued by the Chinese government.
It was the third time for China to issue yuan government bonds in Hong Kong. China sold its first sovereign bonds in Hong Kong in September 2009, raising 6 billion yuan. It was also the first time the ministry had introduced a benchmark seven-year tenor to institutional investors. Seven years is a key maturity in the onshore government bond funding curve.
"We think the introduction of the seven-year tenor in the offshore market not only will fill the demand for the duration in this sector in the offshore market but will also help align the Chinese Finance Ministry's liability profile both in the offshore and onshore markets," said Deutsche Bank in a report.
The Wednesday auction attracted high investor interest, garnering 69 billion yuan worth of bids within one hour.
