...Offshore financial market of RMB Thanks to globalization, people can do business all around the world and the business dealing with foreign currencies has gradually emerged. Those business activities are known as offshore finance. Offshore financial centers (OFCs) are where these activities accumulates. According to Ahmed Zoromé, IMF Working Paper/07/87, an OFC is a country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy. Clearly, the appearance of OFCs stems from the development of world trade. Efforts to evade financial regulation and political considerations of regulation are among the most important reasons. The formation of OFCs is not a result of human force but a consequence of international political and economic factors. OFCs often enjoy a series of benefits attracting business. Besides the obvious tax reasons, OFCs often have these advantages such as political stability, business-friendly regulation and laws, and above all discretion. Since Chinese economy grows fast in recent years and the China becomes more open after joining WTO. Trading, travel industry and consuming have made the amount of oversea RMB transaction increase and the oversea RMB flow more frequently. Payment and settlement of offshore RMB have become an undeniable fact. Hence there have been substantial needs for an OFC of RMB to deal with this issue. Hong Kong, as an international finance centre...
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...Menu for Renminbi Bonds in Hong Kong: Dim Sum or Synthetic? Overview 1 2 5 Table of Contents: OVERVIEW MARKET PERSPECTIVE SURGE IN RENMINBI DEPOSITS AND TRADE SETTLEMENTS IN HONG KONG GROWTH IN RENMINBI TRADE SETTLEMENTS SUBJECT TO REGULATORY MEASURES SURGE IN DIM-SUM BOND ISSUANCE DIVERSIFICATION OF ISSUERS THE “DIM-SUM SUBSTITUTE”: SYNTHETIC RENMINBI BONDS 6 6 7 9 This report addresses recent developments in the offshore market for bonds denominated in mainland China’s currency, the Renminbi (RMB), whether settled in RMB or another currency. Called “dim sum” bonds when settled in RMB or “synthetic” if settled in other currencies such as U.S. dollars, these debt instruments have so far come out primarily in Hong Kong, with several synthetic convertible bonds in Singapore. However, in future, Chinese authorities may allow offshore RMB transactions elsewhere, and more euro-RMB bonds1 issued in other financial centers could soon appear. A comment answering investors’ frequently asked questions on our approach to rating both types of these bonds will follow within a few weeks. The progressive internationalization of the RMB will facilitate growth in Hong Kong of both kinds of RMB-denominated bonds. In particular, the rapidly expanding volume of the city’s deposits and of trade settlements in RMB has driven growth in dim-sum bonds, and the Chinese government’s allowance last week for Chinese enterprises to settle direct overseas investment in RMB will catalyze this trend...
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...provided in Hong Kong financial market. Hong Kong, as the first offshore market launching the renminbi business in 2004, it provides an ideal platform and sophisticated financial infrastructure for the financing and asset management, reminbi deposit, trade settlement and other renminbi services to cater to the needs of businesses. 1. Renminbi Deposit Since 2004, the Chinese government has reinforced the Hong Kong as an offshore renminbi business centre. Hong Kong is the largest renminbi liquidity pool outside Mainland China, and the gradual rise of the amount of renminbi deposit supports other renminbi businesses in Hong Kong. Between September in 2010 and September in 2010, the total amount of renminbi deposit has risen more than 300% from RMB149 billion to RMB622 billion. The rapid increase could be accounted for the poor performance of the equity market, leading to the search for another alternative investment for investors’ savings. When equity market is not doing well, RMB deposits and debt instruments could be no doubt the alternatives. Secondly, the expectation of the appreciation of renminbi has led to a rise of expected return on renminbi deposit, which increases the value of the renminbi, and it attracted more investors to deposit their money in reminbi. Comparing to the low Hong Kong dollar-deposit interest rate, which is around 0.1% because of following U.S. interest rate, Hong Kong dollar deposit became less attractive. Third, the cross border RMB trade settlement...
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...Should LERS be continued? On 23 and 26 OCT 2007, The Hong Kong Monetary Authority (HKMA) intervened TWO times in the market, for the first time since May 2005, to increase liquidity and curb the Hong Kong Dollar (HKD)’s strength. The interventions is very normal as the HKMA has already given the undertaking to defend the peg by buying US dollars (USD) and selling HKD simultaneously in order to settle the excess demand of HKD in public. The economy in USA turns bad due to the mortgage problems. (refer to table 6A1 and 6A2); An expansion of the qualified domestic institutional investors program (QDII) whereby mainland investors can buy Hong Kong Stocks; The upcoming Initial public offer (IPO) such as e-commerce portal Alibaba.com hold about Four thousand billion HKD (Table 6B: New listing Companies Statistic); The above three main factors associated heavy demand for the local currency, i.e. HKD. Table 6A.1 Global Mortgage-Backed and Asset-Backed Securities [pic] Sources: Thomson Financial According to data from Thomson Financial, the amount of newly issued mortgage-backed and asset-backed securities reached USD1,542 billion in the first half of 2007, accounting for 37.5% of the newly issued debts in the global debt capital markets. Table 6A.2 Institutions with losses in sub prime business(by date) [pic] Sources: Bloomberg, bank of communication Some banks sponsor off-balance-sheet vehicles which are leveraged and use loans to invest in the sub-prime related credit...
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...development of Chinese Mainland, Shanghai, the pearl of the Orient become one of the most developed city in Mainland, aimed to be “four-Centers”, which are clearest themes of Shanghai’s 12th FYP(Five Years Plan), international financial, trade, shipping and economic center. Hong Kong, one of mature international finance center in the world, is always a module for Shanghai, and it is a hot topic to compare these two cities. Years ago, the Chinese government announced a national strategy about Shanghai. According to this strategy, Shanghai is planed to be built into an international financial center completing with mature financial centers and full of a wide range of globally competitive financial products and service by next decades. As an international financial center, Shanghai plans to become the world’s center of trading, pricing and clearing of Chinese yuan assets. The initiative will facilitate FIE(Foreign-invested enterprise) growing use of funds, like offshore RMB and the issuance of RMB-denominated bonds. Other initiatives include finance leases, small loan services, local innovation products and financial guarantees for FIEs(Foreign-invested enterprise). As a mature international finance center, Hong Kong and Shanghai have gradually been as competitor for the finance center in Greater China region, in Asia, even in the world. With the rapid rising position of Shanghai together with China mainland, more and more multinational corporations move Asia headquarters to Shanghai...
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...1. Introduction to C&S Department, HKSAR 1.1 Department background The place where I took the internship is called the Census and Statistics Department, HKSAR.The Census and Statistics Department (C&SD) together with statistical units established in various government departments forms the Government Statistical Service (GSS), representing a network for the provision of government statistical services. The latter are generally called the "outposted statistical units". Broadly speaking, most general-purpose statistics come under the responsibility of C&SD. The statistical units in various government departments take care of specific-purpose statistics and provide necessary support in the application of statistics. Generally speaking, the whole work of C&SD can be classified into three categories: 1) Conducting statistical surveys and operating statistical systems for the production of social and economic statistics including data series on such areas as population, external trade, commerce and industry, labour, prices, national income and Balance of Payments; 2) Performing statistical analysis and disseminating statistical data and analytical results; and 3) Providing consultation and support services on statistical matters to various government departments. And the mission of C&SD is 1) to provide adequate, relevant, reliable and timely statistics to facilitate research, discussion, planning and decision making within the government and in the community; 2) to ensure that the...
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...City University of Hong Kong Associate of Business Administration (Financial Services) | CM 20458Investment Banking | | | Program: Associate of Business Administration (Financial Services) Course: Investment Banking Course Code: CM 20248 Tutorial Group: T03 (Monday) Tutor: Mr. Joseph MOHAN Date of submission: 5 November, 2010 Word Count: | | | | | | | | | | | | | | | | | | Investment Banking ________________________________________________________________________________________________________ Content * Proposal Purpose……………………………………………… | P. 3 | * Background of the Hong Kong-Zhuhai-Macao Bridge………. | P. 4 | * Benefit created by the HZMB………………………………… | P. 5 - 6 | * Financing Model of the HZMB……………………………...... | P. 6 – 7 | * Sponsors of the HZMB……………………………………...... | P. 8 | * Syndication Strategy………………………………………….. | P. 9 | * Risk Allocation Strategy. …… . . ……. . .…………………… | P. 10 | * Term Sheet. . . . . . .… . .…… . .…………………… .……… . | P. 11 – 12 | * Potential Risks and Risk Management…………………………. | P. 13 - 14 | * Conclusion……………………………………………………...
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... 4 2. PROPERTY BUBBLES IN HONG KONG ………………………………….…………….. 5 INFLATION AND INFLATION RATE IN HONG KONG ……………………………….. 10 3. CONCLUSION…………………………………………………………………………18 4. REFERENCES ……………………………………………………………………………..19 5. APPENDICIES …………………………………………………………………………..... 20 Appendix 1 ………………………………………………………………………………… 20 Appendix 2 ………………………………………………………………………………… 21 Appendix 3 ………………………………………………………………………………… 22 Appendix 4 …………………………………………………………………………………23 Appendix 5 ………………………………………………………………………………… 24 Appendix 6 ………………………………………………………………………………… 25 INTRODUCTION Resources and scarcity are the basic elements and tenet of economics, so resources and scarcity are related to human wants and desires. Money and time are the most constantly for the resources and scarcity which are the allocation from the resources and impacting the economically efficiency. Hong Kong has been enjoyed as one of the four dragons in Asia for 30 years with the rapid growth of economy worldwide and globalization, but she also suffers from the worldwide downside of economy due to the poor fundamental and lack of long–run strategies that trigger the existing difficult situation. There have many issues and challenges threatening Hong Kong economy recently, we analysis and evaluate two important problems, (1) Property bubbles in Hong Kong (2) Inflation that impacting Hong Kong economy in the short and middle-term...
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...Shenyang, Tianjing, Guangzhou, Foshan, Zhongshan, Huizhou and Heyuan. Ownership structure 62% stock shares of the company are held by Top Coast Investment Ltd whose major shore holder is the family of the founder of Agile. The second largest shareholder JP Morgan Chase & Co holds 4.38%. Dimensional Fund Advisors Ltd and Blackrock hold 1.18% and 1.16% shares, respectively. The estimated public float is between 30% and 35%. Capital Structure The total assets account for RMB 124,367 million. The company owns short-term borrowings and long-term borrowings RMB 16,363 million and RMB 26,203 million. The shareholders’ equity is RMB 33,851 million. The company’s total debt accounts for 34.2% of total assets. Its net debt/total equity is 72.4% and debt/common stock is 125.8%. Benchmark against the comparables There are lots of property companies in China or listed companies in Hong Kong. However, the most comparable companies should be property companies operating in mainland China but list in Hong Kong. Thus, the eligible comparable companies are Country Garden, Evergrande, Longfor, China Aoyuan and Guangzhou R&F. Respect to the financial ratio, Agile has a better current ratio against the industry. Its total debt to assets is slightly higher than the industry average but its total debt to equity is still lower than the average level. Agile’s financing strategy is walking in the middle way in the industry. Company name | Current ratio | Total debt to assets | Total debt...
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...Case Study Why the telecoms industry is doing business in RMB Telecoms equipment and handset manufacturers like Telco – the representative but fictional example in this case study – recognise that they can only stand out in a tough sector by competing on an international scale. This increasingly means doing business in high-growth emerging markets like China and leveraging RMB to gain that vital competitive advantage. Background Telco, with its Head office based in London, began life as a manufacturer of wire-line equipment for the Western European aerospace sector. Following the privatisation of national telecoms operators from the late 1980s, it refocused its business to supply carriers in Europe and the US. Telco has been an HSBC client for more than ten years, after finding that domestic banks could not match its international expansion strategy. HSBC’s global network supported its exports growth across new markets by supporting all Telco’s export invoices. Rolling waves of telecoms deregulation saw Telco and other suppliers enter the mobile handset market in the 1990s, attracted by the significant growth opportunities. The intense competition and tightening margins in equipment supply – not least the demand from emerging markets – saw Telco make its first trip to China on a sourcing mission for basic components. Building a business In China At the company’s request, HSBC relationship managers helped guide Telco’s entry into China by working with professional advisors...
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... BOARD OF DIRECTORS Executive Directors Ding Wuhao Ding Huihuang Ding Huirong Wang Jiabi COMPANY SECRETARY Choi Mun Duen HKICPA FCCA, CAYMAN ISLANDS SHARE REGISTRAR AND TRANSFER OFFICE Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Grand Cayman KY1-1110 Cayman Islands (Chairman) AUTHORISED REPRESENTATIVES Ding Wuhao Choi Mun Duen Independent Non-executive Directors Yan Man Sing Frankie Sun Xianhong Liu Jianxing (Resigned and effective from 2 September 2013) Tsui Yung Kwok REGISTERED OFFICE Cricket Square, Hutchins Drive PO Box 2681 Grand Cayman, KY1-1111 Cayman Islands HONG KONG SHARE REGISTRAR Computershare Hong Kong Investor Services Limited Shops 1712–1716, 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong BOARD COMMITTEES Audit Committee Yan Man Sing Frankie (Chairman) Sun Xianhong Tsui Yung Kwok Liu Jianxing (Resigned and effective from 2 September 2013) HEAD OFFICE IN THE PRC 361˚ Building Huli High-technology Park Xiamen, Fujian Province...
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...Through sports, we inspire people the desire and power to make breakthroughs Corporate Profile Li Ning Company Limited is one of the leading sports brand enterprises in the PRC, possessing brand marketing, research and development, design, manufacturing, distribution and retail capabilities. The Group’s products mainly include footwear, apparel, accessories and equipment for sport and leisure uses under its own LI-NING brand. The Group has established an extensive supply chain management system, and a distribution and retail network in the PRC primarily through outsourcing of manufacturing operations and distribution via franchised agents. The Group also directly manages retail stores for the LI-NING brand. The Group adopts a multi-brand business development strategy. In addition to its core LI-NING brand, the Group distributes sports products under its Z-DO brand via hypermarket channel. The Group has established a joint venture with AIGLE under which the joint venture has been granted an exclusive right by AIGLE to manufacture, market, distribute and sell outdoor sports products under the French brand AIGLE for 50 years in the PRC. The Group has a controlling interest in Shanghai Double Happiness, which together with its subsidiaries are principally engaged in manufacture, research and development, marketing and sale of table tennis and other sports equipment under the Double Happiness brand. A member of the Group has also entered into an exclusive 20-year license agreement with...
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...instruments to drive expansion of RMB, weakening the U.S. dollar monopoly in the basket of the world reserve currencies. By 2013, the RMB is the 8th most traded currency in the world. On 17 August 2010, PBoC issued policy to allow Central Bank, RMB offshore Clearing Banks and offshore Participating Bank to invest the excess RMB in debt securities, in onshore Inter-bank Bond Market. In October, China further open up both FDI and ODI in RMB (Pilot RMB Settlement of Outward Direct Investment) and nominated Xinjiang as the first pilot province (which in early 2011 expanded to 20 pilot areas). In June 2013, United Kingdom became the first G-7 country to set up an official currency swap line with China. As of July 2014, 25 countries have signed the RMB Bilteral Swap Ageeement with PBoC with total facilities of over ¥2.7 trillion. These agreements tell us that China decided to increase the role of RMB in the world currency market. 2007: Creation of Dim Sum bonds and offshore RMB bond market The dim sum bond market generally refers to RMB-denominated bonds issued in Hong Kong. The majority of dim sum bond are denominated in CNH, but some are linked to CNY (but paid in USD). In July 2007, dim sum bonds worth a total of US$657 million were issued for the first time by China Development Bank. These financial assets were issued to foreign investors in renminbi, rather than the local currency. In June 2009, China allowed Financial Institutions in Hong Kong to issue dim sum bonds. HSBC was...
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...Pack-A-Card Gift Card Packaging Company Marriott School Of Management 2008 1 of 1 Pack-A-Card GIFT CARD PACKAGING COMPANY "The possible benefits make this proposal very tempting," mused Mr. Craig Hunt, "but how would it affect the other areas of the business?" In a recent planning meeting held in July 2008, production manager, Ms. Ching, proposed that Pack-A-Card (PAC) Gift Card Packaging Company adopt a level-production strategy for the next year. PAC's sales were seasonal and the company, therefore, produced on a seasonal basis. By switching to level production, Ms. Ching hoped that production costs could be minimized. Pack-A-Card Gift Card Packaging Company designed and manufactured a variety of gift card packages with tin boxes for large retailers and department stores. Each year PAC produced from 15 to 20 formats of gift tin boxes in a broad range of designs. Dollar sales of a particular design varied by as much as 25 to 35% from year to year depending on fashion trends, color preferences, and consumer spending patterns during the Thanksgiving and Christmas Holiday season. The manufacture of gift card packaging was a highly competitive business. The manufacturing process was relatively simple and capital requirements were not large. Because design, price, and functionality were so important to consumers, competitive pressures on smaller firms were intensified by the existence of a number of large international manufacturers. These large manufacturers had ample financial...
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...often slipped into a less than envious position through a gradual process, in which the decline could be discerned widely by both outside political observers and ordinary people, the sudden collapse of corporate dinosaurs nowadays can take even the closest, longterm corporate analysts by surprise. Unfortunately, this was the case in the example of Kelon, a domestic household appliance manufacturer that once enjoyed the honour of being cited as a typically successful case study on Chinese firms in international business schools. Entitled Kelon: China’s Corporate Dragon,1 the study regarded it as an exemplar of dynamic Chinese firms rising from China’s embracing of the market economy during the 1980s and 1990s.2 The timing of the publication, namely the year 2001, could not have been more embarrassing for both the authors and business school students. Guangdong Kelon Electrical Holdings Co. Ltd shocked investors and equity analysts alike by reporting an unprecedented net loss of RMB 1.5 billion (HK$17 million) in the same year, with appalling scandals of the controlling shareholder’s expropriation of company assets. The rise and fall of Kelon is deeply rooted in its corporate governance system, which was developed when China’s economy was under a complex transition that induced block shareholders to play a dual role – of helping on one hand and appropriating on the other – in controlling their publiclyowned corporations. Kelon rose due largely to the support of its largest shareholder...
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