Foreign Exchange Market: New Direction Of Financing In The Euro Area

Hongkong's scramble for Renminbi deposits continues to heat up.

In addition to banks that have already offered preferential policies, new banks have been offering preferential interest rates to absorb Renminbi deposits.

The recent rise in the interbank lending rate in Hongkong has shown that the trend of liquidity in Hongkong has not been alleviated.

According to the insiders, the expectation of RMB depreciation has led to a decrease in the willingness of mainland residents to hold renminbi, and the "outlet" of all kinds of Renminbi, such as Shanghai and Hong Kong, has been increasing, leading to a tightening of liquidity in the Hongkong market.

With the increasing cost of bank capital in Hongkong, the low cost advantage of attracting mainland enterprises to issue Renminbi bonds (commonly known as "dim sum debt") has been challenged.

Following the ICBC Asia, Hongkong, Standard Chartered Bank and so on, Wing Lung Bank recently launched a preferential deposit policy for RMB deposits.

The reporter noted that the official website of Wing Lung Bank showed that the event began on February 9th until further notice, and the bank customers could deposit 4.4% yuan interest rate (reference interest rate in March 12, 2015) with a new fund of 100 thousand yuan or more 1 year deposit.

According to the South China Morning Post, Wing Lung Bank adjusted its interest rate from 100 thousand to 1 yuan in March 12th from 4.1% to 4.4%.

At the same time, other banks that have already offered deposit concessions are also constantly adjusting.

For example, the interest rate setting rate of the Bank of Hongkong in March 13th showed that the annual preferential rate of RMB 9/12 for the general customers was 50 thousand yuan on the average of 3.99% months, compared with 3.66% in March 3rd.

Yang Yuting, a senior economist at ANZ bank, told the daily economic news reporter that banks in Hongkong, especially those with relatively good development in the mainland, had higher cross-border capital utilization and more capital passages, so these banks were willing to absorb deposits with higher interest rates.

It is reported that the other side of Hongkong's high interest rate banks is the current situation of Hongkong's liquidity tightening.

In fact, since February this year, the interbank lending rate of Hongkong's interbank has been higher, and the overnight interest rate has exceeded 8% at the highest level.

In March 13th, the overnight interest rate of RMB interbank offered in Hongkong was quoted at 5.021%, while the interbank offered rate (Shibor) in the onshore market in Shanghai was 3.436% overnight.

Zhao Qingming, chief macroeconomic researcher at CICC Research Institute, told the daily economic news reporter that with the gradual increase of related reflux channels such as Hongkong and Hong Kong, the demand for RMB in the market has not decreased. However, as the RMB exchange rate fluctuates sharply, people's willingness to hold renminbi is relatively reduced.

Data from the Hongkong monetary authority in January showed that the yuan in Hongkong and the cross border trade settlement declined in the same month.

According to the data released by the safe, as at the end of December last year, the amount of cross border capital flowing through Hongkong and Hong Kong through the mainland to Hong Kong was about 9 billion 900 million US dollars.

Among them, through the "Shanghai and Hong Kong Tong" flows from Hongkong to the mainland 11 billion 400 million US dollars, through the "Hong Kong Shanghai Tong" from the mainland to Hongkong 1 billion 500 million US dollars, the overall capital flows to "North" mainly.

Previously, the issue of Renminbi bonds to Hong Kong was a choice for many mainland companies.

One way.

With the increasing cost of bank capital in Hongkong, the cost advantages of attracting mainland enterprises to issue debts in the past have been challenged.

In the industry view, due to the expected increase in the Renminbi depreciation and other factors, investors are

The enthusiasm is decreasing, which may inhibit the issue of dim sum debt.

As of now, the total "dim sum debt" issued by our country is only 250 million US dollars this year, much less than that of the first 3 months of last year, according to a recent report by the UK.

At the same time, the US dollar.

It is stable at a high level, with $16 billion 300 million in dollar denominated bonds issued so far this year.

In addition, some areas with lower financing costs have also become a new destination for financing of mainland enterprises, such as the euro zone which has announced the introduction of quantitative easing.

The Financial Times quoted data from Dealogic that China's mainland enterprises have issued Euro value bonds worth 2 billion 900 million US dollars this year.

By comparison, the figure was zero in the first quarter of last year, and it was only 3 billion 300 million dollars in 2014.

Zhao Qingming believes that financing enterprises often have their own cost considerations; generally speaking, they will choose to finance less capital costs.

In fact, since the beginning of this year, the State Grid, China Construction Bank, China shipbuilding industry group and Baosteel Group have issued Euro valuation bonds.

It is understood that Baosteel Group previously issued 500 million Euro 3 year unsecured debt, coupon rate of 1.625%.