CNH Tracker-Dim sum market set for a booster shot

Wed Oct 23, 2013 10:24pm EDT

By Michelle Chen
    HONG KONG, Oct 24 (Reuters) - As China makes important
strides to expand the yuan's footprint beyond Hong Kong, more
favorable policies are expected to breathe fresh life into the
moribund offshore yuan bond market in the former British colony.
    Of particular note is the primary market's new sales, which
have come to a shuddering halt after the summer even as the $80
billion so-called "dim sum" debt market eked out steady gains
for three straight months since July.
    That is in contrast to a flurry of Chinese names that made a
beeline into the dollar bond market which has seen a rebound in
activity as the U.S. Federal Reserve delayed its plans to start
winding back its stimulus.
    Bankers believe a long-awaited new batch of quotas which
allows Chinese issuers to sell dim sum bonds will be granted 
soon to activate the market. The total size may climb to 75
billion yuan ($12.33 billion), up 50 percent from the first
batch.
    State-owned enterprises (SOEs) controlled by local
governments are also likely to be permitted to issue yuan bonds
in Hong Kong, in addition to those owned by China's central
government.
    The world's second-largest economy is sparing no effort to
promote the wider use of its currency as it aims to advance its
status on par with the dollar. The yuan now ranks as the eighth
most traded currency in the world, according to SWIFT. 
    Beijing extended its prized offshore yuan investment scheme
to Singapore and allowed direct currency trading between the
yuan and Singapore dollar on Tuesday, following a similar
package bestowed to London last week.
  
    "The Chinese government will implement soon, initiatives
that will expand the dim sum bond pilot scheme, to enable more
China-based issuers to issue dim sum bonds directly," says Ivan
Chung, a Moody's senior credit officer.RECENT STORIES:
CNH Tracker - As London aspires to larger yuan role, Hong Kong
only cements its lead 
    
More stories about the CNH market                 
Daily onshore yuan reports                        
Daily China money market reports                  
  
Offshore yuan rate    Onshore yuan rate  
Offshore yuan dealt Onshore yuan on CFETS 
  
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