Central Asia

The Republic of Tajikistan is one step closer to selling its first dollar bond after gaining parliamentary approvals recently.

Kazakhstan’s Nostrum is planning a combined debt buy-back and new issue, and will meet investors from Monday and will be hoping to emulate the success of national oil champion KazMunayGas in April this year.

China Securities Regulatory Commission welcomes the prospect of A-share inclusion by MSCI, China’s State Council publishes a new negative list to make foreign investment easier in free trade zones, and the Asian Infrastructure Investment Bank (AIIB) makes its first equity investment.

The European Central Bank switches €500m-equivalent of dollar for renminbi in its FX reserves, the International Monetary Fund adjusts China’s GDP growth forecast while recommending a more transparent monetary policy, and Singapore does a policy U-turn to support One Belt One Road (OBOR).

People’s Bank of China (PBoC) plans new bitcoin regulations, Stock Connect southbound flows hit new highs, financing costs of renminbi bonds are cheaper offshore than onshore for the first time in 28 months.

China’s FX reserves rise for the fourth consecutive month in May, a Chinese securities regulator says the country will start allowing foreign investors to trade commodities futures onshore, and Ford Motor’s onshore financial arm issues RMB-denominated bonds.

In this week’s round-up, the Hong Kong Exchange’s USDCNH futures record their second best trading volume on Wednesday, renminbi deposits in Hong Kong increase by 4.1% in April, and China and Germany agree to co-operate on trade and finance.

Risk appetite propelled CEEMEA into a bullish second quarter with nearly $16bn of bonds printed in Easter week. Saudi Arabia led the charge with a $9bn sukuk, but demand for duration played into the hands of KazMunayGas which raised $1.25bn of 30 year debt.

Two large emerging market corporates were out with multi-tranche deals on Tuesday, Kazakhstan’s state owned oil company and Abu Dhabi sovereign investment fund Mubadala.

KazMunayGas is preparing to bring the first deal from the Caucus region this year and will be hoping the red hot market stays warm enough to drive its funding costs down.

The European Bank for Reconstruction and Development has priced the first non-domestic Kazakh tenge inflation-linked bond, raising the equivalent of $99m on Monday.

Lenders in the $260m syndicated loan for Kaz Minerals have agreed to waive the net debt to Ebitda covenant in the deal for another year as lower copper prices weigh on earnings for the Kazakh mining firm.