CCTV.com - CNTV English - CCTV News


Homepage > News > Biz >

Standard Chartered sees potential in yuan-trade finance

08-29-2011 14:33 BJT

HONG KONG - Multinationals that trade with China and need to hedge their yuan exposure will be a good source of business for Standard Chartered PLC, a senior executive at the bank's Hong Kong unit said Friday, the Wall Street Journal reported.

Last year, China relaxed rules on offshore yuan trading, fueling growth in settlements in the Chinese currency. Standard Chartered saw a 60% jump in the first half of this year in its clients' trades settled in yuan from the second half of last year, and expects demand to grow from clients looking to hedge their yuan exposure, an executive said.

Benjamin Hung, chief executive at Standard Chartered Bank (Hong Kong) Ltd told Dow Jones Newswires in an interview that there's greater potential to help clients hedge currency positions to facilitate yuan-trade settlements compared with earning fees in the offshore yuan-bond business. The need to bulk up StanChart's hedging business is also important as fees from such bonds, or so-called 'dim sum' bonds, are typically minimal.

The emerging markets-focused lender—which is one of Hong Kong's three note-issuing banks—has been at the forefront of the burgeoning offshore yuan business, underwriting billions of dollars worth of dim sum bonds and actively boosting spot and forwards trading in yuan over the last year.

Foreign companies have in the past used mainly the US dollar to settle payment for goods from their Chinese trading partners. However, the more liberal rules governing offshore yuan trading, as well as expectations of further appreciation in the Chinese currency, are fueling rising demand for trades to be settled in the renminbi.

In 2010, China recorded 506.3 billion yuan ($79.27 billion) in yuan-trade settlements, representing 5.7% of its overall foreign trade, according to figures from China's central bank.

In the year-to-date, banks have underwritten $8.44 billion worth of dim sum bonds, surging 60% from total issuance of such bonds in 2010, according to data provider Dealogic.

Still, Hung said helping the market to evolve is more important than making money through higher bond fees.

"It's just in the beginning phase...if you're trying to use it as a milking machine, you're playing it wrongly," Hung said.

Editor:Yang Jie |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program