dim sum bonds

So, ICBC is to become China’s first mainland bank to issue an offshore renminbi bond in London. The launch, which should take place next month, is a further milestone in the development of the renminbi as an international currency, and demonstrates London’s growing role as the European time zone centre for renminbi tradingRead more

You can almost hear the microwave ping. After nearly three months in the deep freeze, dim sum is finally back on the menu.

On Thursday afternoon, French energy producer Total became the first company to raise money in the offshore renminbi market since June 18, prompting a collective sigh of relief from Hong Kong’s debt bankers. The market shutdown had been by the far the longest in the short history of dim sum bonds. Read more

The market for renminbi-denominated credit raised outside China has gone four weeks without a single deal – it’s longest ever barren spell. Tee Chong-hong, head of CNH Capital Markets Products at Standard Chartered tells the FT’s Josh Noble that the market has been hit by speculation about the end of QE in the US and interbank liquidity in China.

China’s credit crunch may be over, for now at least. But it seems nobody told investors in dim sum bonds, who have quit the market at a rapid clip and have yet to come back.

Average yields paid on dim sum bonds had been on a steady decline since around this time last year, dipping as low as 3.88 per cent in April – the lowest level since the early days of the market. Read more

While credit markets across the world gyrate at the thought of Ben Bernanke’s punchbowl running dry, renminbi bonds are continuing on their merry way. Like many parts of the Chinese financial system, the dim sum market seems to dance to its own tune.

Overnight on Wednesday, the World Bank reopened the books on its recent dim sum bond after investors came back and demanded more. Read more

Dim sum bonds showed signs of fatigue last year, despite their young age. Issuance of offshore renminbi bonds grew compared to 2011 – but only by a whisker, while a summer sell-off in the Chinese currency prompted a spike in borrowing costs. On both counts, it was a far cry from the market’s early days of breakneck growth and barely visible coupons.

But 2013 has begun on a more steady footing, with growth returning and yields falling once again. And soon the market will get a further boost – with the launch of benchmark index products. Read more

Slowly but surely, Brazilian banks appear to be developing a taste for dim sum.

BTG Pactual on Tuesday returned to tap the so-called dim sum bond market – as renminbi-denominated debt issued overseas are called – raising Rmb1bn ($160m) via a three-year paper priced at 4.2 per cent. Read more

Russian companies have this year raised more money via the offshore renminbi debt market than their Chinese counterparts.

Russian companies – all of them banks – have raised $482m via four debt issues, compared to $477m by Chinese companies, according to Dealogic, highlighting the growing appeal of the dim sum bond market as a cheap source of funding for emerging market borrowers. Read more

The dim sum bond market is one where “firsts” seem to come along with alarming regularity. It’s hardly surprising – the market is only three years old. But many of those firsts are either technical, incremental or, frankly, not that interesting.

However, here’s a potential new thing that looks well worth some attention: the first non-Chinese government body to raise money with a dim sum bond. Read more

Pacific-rim Chile has long looked to the Far East for trade. Now Banco Santander Chile, the country’s second-biggest lender by assets, is sampling some financial dim sum.

The Spanish-owned bank became the first Chilean bank to raise money in China’s bond market by issuing RMB500m ($80m) in two-year renminbi-denominated paper, dubbed “dim sum” bonds. Read more

Amid all the talk about Taiwan and China’s improving relationship, not much thought is given to a third party that could lose out on business — Hong Kong, historically the back door for Taiwan’s business dealings with the mainland.

As Schive Chi, head of the Taiwan stock exchange, points out, his own efforts to get companies to list in Taiwan – plus the recent news that Taiwan can begin clearing renminbi itself - will help the island reclaim a slice of Hong Kong’s pie. Read more

Financial centres around the world falling over themselves for a piece of the rapidly growing market for dim sum bonds – renminbi currency bonds sold outside the Chinese mainland. Robin Wigglesworth looks at how London has positioned itself near the top of the queue.

Investors appear to be losing their appetite for dim sum bonds, or renminbi-denominated bonds issued outside mainland China.

Over the past three months, dim sum bond yields have not stopped rising. An index of 120 such bonds compiled by Bank of China shows that average yields are now 5.6 per cent, up from 4.8 per cent in March and 3.5 per cent a year ago (see chart after the jump). Read more

HSBC has been quick to score brownie points with the UK Treasury by drawing up plans for London’s first renminbi bond issue – and the first outside mainland China and Hong Kong.

Even before the bank itself published an official release, chancellor George Osborne jumped on the story on Wednesday and crowed: “This morning, we saw the launch of the first RMB bond outside of Chinese sovereign territories. And it happened here in London.” Read more

Expectations that China’s redback can only rise and rise are one reason dim sum bonds – renminbi-denominated bonds issued in Hong Kong – have seen such explosive growth over the past 18 months.

The view was that with the Rmb increasing on average 4 per cent a year against the US dollar, dim sum bonds, even those offering yields as low as 1.15 per cent, looked like a good bet for return hungry investors once currency appreciation was factored in.

But with prospects for the Rmb’s appreciation no longer such a sure thing following Wen Jiabao’s speech last week in which he said the Chinese currency was close to its “equilibrium value”, what are the implications for this nascent corner of HK’s capital market? Will investors be bailing out? Read more

China Development Bank’s initiative in bringing together the development finance arms of the five major Brics countries to sign an agreement – whereby each bank pledges to extend credit in its own currency to the four others – in Delhi later this month speaks volumes about the ambitions of the mainland policy bank. Read more

Roll up, roll up. At Dubai’s bond market, it’s the dim sum special on sale this week. At a tasty yield of 4.875 per cent, you can get yourself a slice of Emirates NBD, the Dubai-based bank’s 750m renminbi ($119m) bond, the first of any such transaction from the Gulf.

The bond, rated A3 by Moody’s Investors Service, the seventh highest investment grade, is another sign that China is gaining economic traction in its increasing important trade partner, the oil-rich Gulf. Read more

Dim sum acquired a distinctly Latin flavour last week after America Movil took the plunge into the off-shore renminbi debt market with a RMB1bn ($158m) issue.

The issue, a first for Latin America, is a long time coming and underscores the deepening ties between the two regions.

But while the issue from the Mexican telecom giant is certainly ground breaking and provides a huge fillip to the nascent dim sum bond market, don’t expect a rush of LatAm corporates to follow suit. Read more

If ever there were doubts about how serious China has become for América Móvil, the company’s plunge into the off-shore renminbi debt market in Hong Kong surely laid them to rest.

América Móvil on Wednesday became the first LatAm corporate to tap the so called “dim sum” bond market. The RMB 1bn ($158m), 3-year issue with a coupon of 3.5 per cent is a reflection of the fact that Latin America’s largest telecoms company, controlled by Mexican billionaire Carlos Slim, is doing an ever greater portion of its procurement with Chinese exporters. Read more

It seems that like many foreigners who visit Hong Kong, Brazilian finance officials have picked up a taste for dim sum during a visit to the Chinese territory.

They have begun talking for the first time about issuing Chinese currency-denominated debt in Hong Kong, or so-called dim sum bondsRead more