August 17, 2011 / 3:19 AM / 8 years ago

China sells retail bonds in offshore yuan mkt at 1.6 pct

HONG KONG, Aug 17 (Reuters) - China’s Ministry of Finance sold a five billion yuan retail tranche of a 20 billion yuan ($3.13 billion) offer at 1.6 percent, the same as a previous sale in November as Beijing takes more steps to deepen the offshore renminbi bond market.

The bond tender was the biggest so far by a single issuer in the growing offshore yuan market and received heavy demand from investors hungry to buy yuan-linked assets.

Since landmark reforms in July 2010 allowed banks in Hong Kong to freely trade renminbi, trade settled in China’s currency has grown by six times. Yuan-settled trade accounted for 7 percent of China’s total trade in the March quarter compared with less than 1 percent in the prior year.

The growth in offshore yuan trade settlement has boosted the development of a so-called “CNH” market in Hong Kong.

Big name foreign borrowers, including the World Bank, Volkswagen (VOWG_p.DE), McDonald’s Corp and Caterpillar , have sold yuan-denominated bonds, or “dim sum” bonds, as they are more colorfully known after a local delicacy.

As of the end of last week, 88 billion yuan ($13.7 billion) worth of dim sum bonds had been issued in 2011, according to Thomson Reuters data, compared with 42.6 billion yuan worth during all of 2010.

A total of 69 billion yuan worth of bids was received for the 15 billion institutional tranche suggesting heavy demand. (Reporting by Charlie Zhu and Michelle Chen; Editing by Jacqueline Wong)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below