The rise of the RMB financing ecosystem: driven by the twin engines of panda bonds and dim sum bonds (Deutsche Bank)
Deutsche Bank believes that the internationalization of the RMB has been elevated to a strategic priority, and panda bonds and dim sum bonds have formed twin engines of differentiation.
Deutsche Bank believes that the internationalization of the RMB has been elevated to a strategic priority, and panda bonds and dim sum bonds have formed twin engines of differentiation. Panda bonds provide financing channels for overseas entities, with a year-on-year growth of 60% in recent years; dim sum bonds show the mature characteristics of diversified issuers and extended maturities. The next stage requires improving secondary market liquidity and risk management tools. One-sentence conclusion: The RMB financing ecosystem is maturing, providing global issuers and investors with reliable options in addition to the US dollar and the euro, and the RMB internationalization process has entered a new stage. Good/bad: Good for the internationalization of the RMB and China’s capital market. It is beneficial to Chinese companies that issue RMB bonds overseas. The market has some awareness of this trend, but the specific data on its scale growth rate and structural optimization may not be sufficiently tracked. Catalysts: 1) Quarterly issuance volume and issuer structure changes of Panda Bonds and Dim Sum Bonds; 2) The People’s Bank of China signs currency swap agreements with more countries; 3) Transaction volume data of the RMB Cross-border Payment System (CIPS).