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By Adam Skuse The Chinese central bank has issued regulations allowing foreign direct investment (FDI) into the country denominated in yuan, in one of a series of recent developments in the internationalization of the currency. The People's Bank of China (PBOC) announced on October 14 that foreign institutional and individual investors will be able to apply for permits to make direct investments using the yuan, on the condition that their investments are in line with China's current laws and regulations. As China's favored offshore center for the yuan and a springboard for the internationalization of the currency, Hong Kong will...

NEWS 2020

By John Paul Egan The Unites States senate unanimously passed a bill on October 11th that would start imposing tariffs on Chinese imports. According to the senate, this comes in a response to the artificially undervalued yuan, maintained by the Chinese government. The senate believes this currency valuation imbalance is instigating the loss of many jobs in America, while giving China a competitive advantage over the US. With the US presidential elections fast approaching and unemployment in the region of 9 percent, this is seen by some analysts as merely a populist decision by the senate for the electorate and...

NEWS 2020

By John P. Egan Last month HSBC Global Asset Management announced it will introduce the HSBC GIF (Global Investment Fund) Renminbi Fixed Income fund to give financial intermediaries an extra investment vehicle for investors seeking to capitalize on in China economic growth. The fund is enlisted for retail across Europe and is part of HSBC Global Asset Management Luxembourg-based Global Investment Funds SICAV. The fund will concentrate on offshore RMB denominated vehicles such as renminbi deposits and bonds. It is to be managed by the HSBC Hong Kong based division, lead by Cecilia Chan. It is being offered in both...

NEWS 2020

By John P. Egan Chairman of the Luxembourg Fund Industry, Marc Saluzzi, spoke at the uxembourg, A Global Financial Services Centre seminar in Shanghai on October 21 saying that Luxembourg was ery interested in becoming an offshore yuan destination, according to an article in China Daily. Luxembourg for Finance, a public-private partnership between the Luxembourg government and the Luxembourg Financial Industry Federation responsible for the promotion of the financial centre, organized a financial mission to Singapore, Kuala Lumpur and Shanghai between 17 and 21 October. The mission was led by Mr Luc Frieden, Minister of Finance and Chairman of Luxembourg...

NEWS 2020

By John P. Egan The World Bank released a report last month concluding that the laundering of earnings from corruption is as a result of companies rather than trust fund instruments. The report also gave offshore jurisdictions a clean bill of health, saying their regulations were clearer than their onshore counterparts. Compiled by the WB's Stolen Asset Recovery team under Emile van der Does de Willebois and titled he Puppet Masters, it is extensive and draws from around 150 corruption cases from 40 jurisdictions. A fundamental discussion throughout the report relates to the notion of determining beneficial ownership; the identification...

NEWS 2020

By Anas Almasri The Securities and Exchange Commission (SEC)has recently approved stricter regulations on companies going public in the US through hell companies and reverse mergers. Such companies now need to meet higher standards before they are allowed to access to American capital. The new rules were announced on Wednesday November 9 and will apply to all three major US listing markets: Nasdaq, NYSE, and NYSE Amex. Private businesses based outside of the US who want to avoid the costs or scrutiny associated with a new public offering process, can choose to merge with an already listed shell company a...

NEWS 2020

By John P. Egan The Bank of Communications China opened its first London branch earlier this month demonstrating China increasing global financial influence. The licence was approved by the UK financial regulator in July. The bank will provide depositary, loan facilitation, trade finance and bond investment services. The establishment of our UK subsidiary is an important step for the bank to build a global wealth management and financial services platform said bank chairman Hu Huaibang in an article by China Daily. In the same article Liu Xiaoming, Chinese Ambassador to the UK alluded to the bank prudence saying, ritain today...

NEWS 2020

By John P. Egan Bank of America Merill Lynch has announced the launch of a new dim sum index; one that tracks offshore yuan-denominated bonds in Hong Kong. As well as being denominated in RMB, bonds included in the index must have sales of over half a billion yuan, a maturity of at least one year and have a fixed coupon schedule. Dim sum bonds are bonds denominated in yuan and issued in Hong Kong; they appeal to investors who desire assets in yuan but cannot invest in domestic Chinese debt. These types of bonds are becoming increasingly popular among...

NEWS 2020