RMB round-up: Smart beta A-share ETFs launch in HK, Cambodia seeks greater RMB usage, ICBC, NDB sign BRI MoU

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ETFs:

• Premia Partners and Caixin Rayliant Smart Beta listed the first two smart beta ETFs tracking Chinese A-shares on the Hong Kong Stock Exchange on October 24. Each ETF consists of roughly 300 stocks, focused on companies driving the mainstream Chinese economy and new economy industries, respectively.

  While smart beta ETFs have been experimented with elsewhere in the world, the two new ETFs tracking Chinese stocks could yield different results, Jason Hsu, chairman of Rayliant Global Advisors, which put together the underlying indices for the ETFs, told GlobalRMB on the sidelines of the listing ceremony.

  “For any of these [smart beta ETFs] to work, you require market inefficiency,” he said. “China happens to be a market where 90% of the trades are conducted by unsophisticated, speculating retail investors… That creates a lot of inefficiencies and opportunities for the more disciplined and scientific investors.”

Trade:

• The National Bank of Cambodia has urged businesses and individuals in the country to use renminbi to promote trade with China, according to an October 24 media report.

  "We want Cambodian and Chinese traders to settle their business transactions in either yuan or riel,” Neav Chanthana, deputy governor of the Cambodian central bank, was quoted by media as saying. “By doing so, we can reduce or eliminate exchange rate risks for traders."

  More active usage of renminbi could also attract Chinese investors and tourists, she added, noting that the Cambodian government has allowed Chinese tourists to use renminbi in the country.

Belt and Road:

• ICBC has signed an MoU with the NDB to support the financing of infrastructure construction projects along the Belt and Road, according to an October 27 announcement by the Chinese bank.

  ICBC will work with the Shanghai-based development bank to offer a variety of financial services, including settlement and clearing, project financing, bond underwriting and investment.

Payments:

• The Fuzhou branch of Hua Nan Commercial Bank and two other financial institutions have been approved as indirect participants of China’s Cross-Border Interbank Payment System’s, effective October 27.