Malaysia is considering issuing a Panda bond after being briefed on the idea by China Construction Bank, said the country’s finance minister Lim Guan Eng.
Lim said the idea was “still at the discussion stage”, but added that Malaysian prime minister Mahathir Mohamad has been briefed. He suggested it was a positive sign of foreign investor demand for Malaysian sovereign risk, despite the fact that the deal is a long way from being pitched to investors.
Malaysia would join a small group of foreign countries that have issued Panda bonds. Hungary, the Emirate of Sharjah and the Philippines were the only sovereign, supranational and agency issuers to tap the market last year.
The deal would not be Malaysia’s only trip to foreign bond markets this year. The sovereign is planning to issue a ¥200bn ($1.8bn) Samurai bond in March.
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In January, total bond issuance in China’s domestic market reached Rmb3.2tr ($476.2bn), according to a report published by the People’s Bank of China. Chinese government bonds and local government bonds took up Rmb170bn and Rmb418bn, respectively. Asset-backed securities accounted for Rmb58.9bn.
Corporate bond issuance was worth Rmb918.7bn, a huge increase from the same period a year before, when there was only Rmb661.4bn of issuance.
Total trading volume in the interbank bond market reached Rmb14.9tr in January, a 61.68% increase year-on-year (YoY) and a 9.83% decrease from December. In the exchange market, total trading volumes hit Rmb699.2bn, a 30.95% YoY increase and a 0.39% increase from December.
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Chinese firms made $9.2bn of overseas direct investment in January, putting their money into 973 offshore enterprises spread across 137 countries, according to a press conference held by the Ministry of Commerce on Thursday.
This included $1.33bn of investment in Belt and Road countries, an 8.1% YoY increase. That pushed the total value of new contracts signed with BRI countries to $4.13bn. There have already been $4.23bn of completed contracts involving Chinese firms investing in BRI countries
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Chinese banks and corporations turned to the offshore bond market en masse this week, raising $8.405bn across 16 deals.
Property companies dominated issuance, with Guangzhou R&F Properties, Kaisa Group and KWG among those selling dollar bonds. But there was also some bank capital supply – both China Citic Bank International and China Construction Bank sold tier two bonds.
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The HKMA and the PBoC are working on developing cross-border mobile payments, an apparent attempt to further the integration of the Greater Bay Area, which combines Hong Kong, Macau and various municipalities in the Guangdong province.
The details of the plan are vague at this point, but HKMA chief executive Norman Chan has told legislators that China’s central bank and Hong Kong’s de facto central bank will study how to “allow people in Hong Kong and the mainland to be able to use their smartphones with e-wallet mobile apps to make payments”.
Retail transactions are not the sole focus. Chan stressed the importance of cross-border wealth management and trade settlement, according to the South China Morning Post.
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Turnover of USD/CNH futures on the Singapore Exchange hit a record in January, rising to $73bn. That was an increase of 146% YoY and 11.6% month-on-month, the exchange said. The contracts had an average daily volume of $3.32bn.
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China auto sales in January dropped 15.8% from December, the seventh straight month of declining sales, according to data from the China Association of Automobile Manufacturers.
Consumers seem to be shifting to new-energy vehicles. While overall auto sales fell, new-energy vehicles sales achieved a 138% YoY increase, hitting 96,000 in January.