CSRC approves more issues of dim sum bonds in Hong Kong

City's offshore yuan hub status given a boost as four firms cleared to offer debt in the currency

PUBLISHED : Tuesday, 06 November, 2012, 12:00am
UPDATED : Tuesday, 06 November, 2012, 4:53am

Mainland regulators have approved four more companies to issue yuan-denominated dim sum bonds in Hong Kong, a fresh boost to the city's status as the No 1 offshore yuan trading centre.

Though undersecretary for Financial Services and the Treasury Julia Leung Fung-yee said the China Securities Regulatory Commission had approved the bonds, she did not identify the companies.

This is the first time dim sum bond issues have been cleared by the regulator since it ratified Baosteel Group last year to issue up to 6.5 billion yuan (HK$7.94 billion) of bonds in Hong Kong.

"The Hong Kong government welcomes more mainland companies to issue dim sum bonds. We'll work with the mainland authorities to improve the related regulations to facilitate such offerings," Leung said on the sidelines of the16th Beijing-Hong Kong Economic Co-operation Symposium in Hong Kong yesterday.

Since mid-2009, Beijing has gradually relaxed restrictions to encourage trade settlement and bond issues in yuan in a bid to accelerate the process of internationalising the currency.

While Hong Kong has taken the pole position in offshore yuan trading, it has competition. State-owned China Construction Bank is planning to sell up to 2.5 billion yuan of offshore yuan-denominated bonds in London, according to bankers. In April, HSBC sold two billion yuan of bonds in London, the first company to do so there. Singapore is also trying to fashion itself as an offshore yuan hub.

"I don't think London poses a threat to Hong Kong. The more international investors will want to invest in yuan products, the more likely they will come to Hong Kong to finance their investments because Hong Kong has the world's largest pool of yuan outside the mainland," Leung said.

Wang Hong, director of Beijing Municipal Bureau of Financial Work, said more Beijing firms would like to issue bonds or shares in Hong Kong.

"Hong Kong is a natural platform for Beijing companies to tap international investors," she said, pointing out that 48 Beijing-based companies are listed in Hong Kong.

Chief Executive Leung Chun-ying and Beijing's acting mayor Wang Anshun oversaw the signing of three co-operation agreements for the two cities in the fields of cultural exchange, food safety and the development of a hospital management institute in Beijing.