Capital Markets, China, Foreign Exchange, Hong Kong - Friday, July 1, 2011 9:26 - 0 Comments

Euroweek offshore RMB report: next steps

Euroweek, July 2011

A debt market that has trebled in size in a year. An evolution in issuers from top-rated policy banks to high yield names, both Chinese and international, in the space of a few months. A trade settlement program that has gone from five coastal cities to more than 67,000 firms in two years. The formation of a new forex market and the launchpad for a new field of investment products. It’s not a bad start.

But what’s next for the offshore RMB?

The most obvious next step is more of what we’ve seen already. By May 20 this year, the total outstanding offshore RMB issues came to RMB103 billion, up from RMB34.3 billion just before the transformative new measures from the Hong Kong Monetary Authority came into effect and widened the range of potential issuers in July 2010. There’s nothing in the near term to stop that rate of growth. RBS predicts a total of RMB180 billion outstanding by the end of 2011, and if anything, that’s the conservative end: Vishal Goenka at Deutsche Bank expects RMB200 billion, across a range of issuer types.

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