Sales of Panda bonds, yuan-denominated debt issued in China by offshore companies, is set to outpace Hong Kong’s Dim Sum market in 2017, with first time issuers such as Hungary shifting to raise Renminbi bonds in China when previously it did so in Hong Kong.  Dim Sum issuance, vibrant in the early days, lost its attractiveness around 2015 with the depreciating trend in the Renminbi.  Moves by overseas issuers towards accessing China rather than the Hong Kong market are additional signs that the latter’s role as an offshore yuan centre could be limited.  Indeed, investors are of the opinion that the onshore market offers much more variety in terms of bond types and terms, not to say better liquidity.  This is no doubt good news to the likes of Portugal, the Philippines and Belarus, who are amongst the group of sovereign issuers planning to tap the market.

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