Dim sum bond

From Wikipedia, the free encyclopedia
Jump to navigation Jump to search

Dim sum bonds are bonds issued outside of China but denominated in Chinese renminbi, rather than the local currency. They are named after dim sum, a popular style of cuisine in southern China.[1]

The first dim sum bond was issued by the China Development Bank in July 2007.[2] Until July 2010, only Chinese and Hong Kong banks could issue renminbi-denominated bonds;[1] deregulation led to the development of an offshore market in renminbi and the internationalization of dim sum bonds.[3] The bonds became more popular as foreign companies sought yuan-denominated assets as the renminbi appreciated in 2011. Although the major market for dim sum bonds is Hong Kong, China Construction Bank became the first Chinese Bank to issue a renminbi denominated bond in London in November, 2012. This followed similar issues by non-Chinese banks like ANZ, HSBC and Banco do Brasil earlier in the year.

35.7 billion yuan in dim sum bonds were issued in 2010 and 131 billion in 2011.[4]

The first foreign-issued dim sum bond by a nonfinancial company was announced in August 19, 2010 and issued in September 16, 2010 by McDonald's.[1] On 5 November 2013, British Columbia finance minister Mike de Jong reported a successful placement of Chinese RMB$2.5bn in dim sum bonds, listed January 14, 2014 on the Luxembourg Stock Exchange.[5] The issue was five times oversubscribed.

Some Indian companies participate in the dim sum bond market, one of them being IL & FS Transportation networks (a subsidiary of the giant lender IL & FS Financial Services).[6]

See also[edit]

Sources[edit]

  1. ^ a b c Fion Li (15 November 2011). "'Dim sum bonds' are fueling China's currency rise". Washington Post.
  2. ^ "CDB to issue 5 bln yuan RMB bond in HK". gov.cn. Archived from the original on 5 July 2008. Retrieved 10 October 2013.
  3. ^ Michael Schuman (15 February 2011). "Is the Chinese yuan becoming a rival to the dollar?". Time.
  4. ^ "Bank of China Beats HSBC as Dim Sum Market Opened: China Credit". Bloomberg Businessweek. 26 October 2011.
  5. ^ Wang Liwei (5 November 2013). "Canadian Province Issues Offshore Yuan-Denominated Bonds". Caixin Online.
  6. ^ Wee, Denise (27 September 2018). "IL&FS Jumps by Record in Dim Sum Bond Market on Hope of Support". Bloomberg Quint. Retrieved 29 September 2018.