HSBC sells first yuan bonds in Singapore
2013-05-28 12:34:54
The Republic’s position as a global financial centre has been further strengthened after HSBC sold the first yuan-denominated bonds here, with Standard Chartered following close behind with its own offering.
HSBC priced 500 million yuan (S$103 million) of two-year notes through its Singapore branch at 2.25 per cent, and it will use the proceeds to finance the bank’s expansion of Chinese currency lending assets.
Yesterday’s news came as Industrial and Commercial Bank of China started yuan-clearing services in Singapore, making the Republic the third offshore centre to provide such a facility after Hong Kong and Taiwan.
HSBC took immediate advantage of this to complete a number of other yuan transactions for its customers here, said HSBC Singapore CEO Guy Harvey-Samuel. “These are the latest in a series of pioneering yuan initiatives we have made in our bid to grow the range of yuan services to support the needs of our customers for yuan-denominated solutions and help boost Singapore’s development as a regional yuan clearing centre,” he said.
Standard Chartered Singapore Chief Executive Ray Ferguson noted the latest moves mark a milestone for the Republic in its status as an offshore yuan hub. “Singapore already leads as a regional treasury centre; is a springboard to South-east Asia along the key trade corridor with China and provides a hub for Asian wealth management and commodities trading,” he said.
According to HSBC estimates, offshore yuan debt sales could reach as much as 360 billion yuan this year. OCBC economist Tommy Xie says this highlights the significance of Singapore’s ability to participate in the market. “These launches have now put Singapore on par with Hong Kong and Taiwan as a full-fledged offshore yuan centre. I expect demand for these offerings to be on the rise, especially among retail investors once the awareness of yuan as a global currency improves,” he said.
Separately, Singapore Exchange said it had launched depository services for yuan-denominated bonds. CEO Magnus Bocker said the enhanced capabilities support customers interested in the internationalisation of the yuan. “As Singapore’s role as an international offshore yuan centre becomes increasingly important, customers coming to SGX can be assured of our commitment to keep growing and enhancing our suite of RMB and China-related products and services.”