Singapore bourse to trade first SGD-yuan stock

PUBLISHED : Thursday, 25 July, 2013, 2:31pm
UPDATED : Thursday, 25 July, 2013, 2:31pm

Yangzijiang Shipbuiding Holdings will be the first stock on the Singapore Exchange to be traded in both Singapore dollar and yuan, as Singapore pushes for bigger share in offshore yuan market.

Trading will begin from August 5, the company said in a statement.

Giving equity investors the option of trading yuan-denominated stocks marks another incremental step in developing the offshore yuan market in Singapore, though retail investor appetite for such stocks has been so far been lukewarm.

Beijing wants to expand the usage of the yuan offshore, but company treasurers want to be sure they have adequate options for investing their offshore yuan holdings before committing, which means having both adequate liquidity and a diversity of asset classes to choose from, including bonds, equities and derivatives.

Most of the offshore yuan action has taken place in Hong Kong, where China promotes wider use of its currency, officially called the renminbi.

Earlier this month, China said it will extend its Renminbi Qualified Foreign Institutional Investor (RQFII) pilot programme, which allows overseas investors to invest in Chinese securities using offshore yuan, will be expanded to London, Singapore, Taiwan and other locations.

Equity issuance in offshore yuan markets has been scarce.

Yuan-denominated stocks listed in Hong Kong have drawn a lukewarm response from investors, who prefer higher-yielding Dim Sum bonds, or yuan-priced bonds also issued in Hong Kong.

The two yuan-denominated stocks in Hong Kong -- Hui Xian Real Estate Investment Trust and Hopewell Highway Infrastructure Ltd -- are below their listing prices.