Hong Kong Regulator Aims to Set Green Bonds Benchmark for the Country’s Issuers
The Hong Kong government and Monetary Authority (“HKMA”) are working together on plans to issue green bonds in the coming year, in order to set a benchmark for the country’s corporates who look to issue debt to fund environmentally friendly projects. Hong Kong is working with the Chinese government in the development of green financing.…
Serving Up Dim Sum Bonds Again
Already seeing low levels of issuance from around 2012 due to weakened expectations of renminbi appreciation, the offshore renminbi bond market spluttered to a standstill when China stunned global markets by devaluing its currency over two consecutive days in August 2015. For most of the last two years there has been no public Dim Sum…
Egypt, Mongolia, Argentina lead the Emerging Market Sovereign Bonds Rally
As a result of investors seeking higher yields, sub-investment grade bonds from emerging market sovereigns such as Nigeria have enjoyed stellar performance this year. The Wall Street Journal reports that BoA Merrill Lynch’s ‘BB’ rated and lower sovereign bond index achieved a 10.2% year-to-date return as compared to U.S. corporate non-investment grade bonds that returned…
ICBC’s Debut Green Bonds Attracts Keen Investor Interest
Adding to Asia’s green bonds market was Industrial and Commercial Bank of China’s US$2.15 billion equivalent debut issuance late last week. The A1 (Moody’s) rated Chinese bank attracted strong interest from Asian and European institutional accounts, who flocked to its 3-tranche issue which proceeds were earmarked to finance green assets including renewable energy projects. US$450 million was…
Opposing Views on Chinese Real Estate Dollar Bonds
The credit worthiness of China’s property sector has been unclear judging from the actions of the international rating agencies. Fitch Ratings upgraded Country Garden to investment grade the week before and Moody’s Investors Service has come out to say that it now expects real estate firms’ credit metrics to improve over the next 12 to 18 months.…
U.S. Tax Plan Punitive For Bonds
U.S. Treasury yields hit a 2-month high as President Trump announced his tax-reform plan, a key provision of which calls for the repatriation of $2.5 trillion that multinational companies are holding overseas mostly in Treasuries. Possible increased selling of these Treasury holdings in order to benefit from the Republic tax plan would increase supply into the…
Treasuries Curve Flattening Resumes post-FOMC: 5s30s at Flattest since 2007
September’s FOMC meeting, which is the 6th this year, saw officials hold interest rates unchanged at 1.00-1.25 with consensus leaning towards a December hike. Perhaps more importantly, policy makers are seeking to avoid possible repeat of 2013 taper tantrum with better communication efforts. Balance-sheet unwind was announced to begin next month in October, as expected.…
Increasing Interest in Indian and Indonesian Bonds
India and Indonesia have together captured almost one-fifth of emerging-market bond net inflows year-to-date through August, as investors continue to be lured by their rich yields and strong growth prospects when they were but a few years ago considered among the most vulnerable in the emerging markets. Between the 2 countries, Indian bonds are offering the…
China Refutes S&P Downgrade Action
Following Standard & Poors’ downgrade of China’s long-term sovereign credit ratings to ‘A+’ from ‘AA-‘ and the short-term rating to ‘A-1’ from ‘A-1+’, both with a ‘stable’ outlook, the Chinese government has come out to denounce the ratings change as “wrong” and not reflecting the economic fundamentals and development potential of the world’s second-largest economy. This is…
Fed to Begin Trimming its Balance Sheet next month; Hints at a hike in Dec
In its recently concluded meeting last evening, the US Federal Reserve Open Markets Committee indicated that it would begin to trim its $4.5 trillion balance sheet next month. In a bid to revive the US economy, the Fed has been consistently buying securities via quantitative easing since the global financial crisis of 2007-2008. The decision…
