The Shanghai-Hong Kong Stock Connect link has made significant in-roads in the opening of China’s capital markets to international trading but barriers to participation, including restricted trading strategies, introduce risk and create operational complexity. The long-term success of the venture hinges on removing these barriers, according to a study carried out for the DTCC.
Deutsche Börse plans a joint venture with the Shanghai Stock Exchange and China Financial Futures Exchange to develop and market Chinese-based financial instruments to investors outside mainland China.
Hong Kong’s share of the international Renminbi market has fallen over the past two years as other countries increase their share, which now stands at 25% compared to 17% in February 2013
The Chinese renminbi has become one of the world’s top five payments currencies, according to new figures released by Swift. The currency, first introduced to foreign investors in 2007, overtook the Canadian dollar and the Australian dollar in the last two months of 2014 to reach the top five.
A landmark deal between China’s Hong Kong and Shanghai stock exchanges is set to open up unrestricted access to the China A-shares market to foreign investors for the first time, starting this month. The deal also reflects the rising internationalisation of the Chinese renminbi currency worldwide.
The London Metal Exchange has launched its new clearinghouse LME Clear. Built by vendor Cinnober, the system is an important plank of the exchange’s ambitions, which have become more grandiose following its takeover by Hong Kong Exchanges and Clearing at the beginning of 2013.
London and Singapore are fast closing the gap on Hong Kong in the race to become centres for offshore renminbi business and capitalise on Beijing’s ambition to make the RMB a global currency.
Money launderers will increasingly move away from the US dollar to the renminbi as US authorities continue to crack down on international banks’ AML systems. The shift will have consequences for London’s aspirations to become a global centre for RMB clearing and settlement.
Europe now represents 10% of total Renminbi payments in value worldwide and is leading adoption beyond Asian countries, with four European countries in the top 10, excluding China and Hong Kong, according to Swift. Overall, the RMB strengthened its position as the seventh most used global payments currency and accounted for 1.57% of global payments.
Chinese broker GF Financial Markets has joined the London Stock Exchange, hoping to capitalise on international opportunities – including the dramatic rise of London as a centre of renminbi trading.
The London Stock Exchange has launched the first Chinese renminbi ETF listed in London, in a deal that will help open the Chinese A shares market up to international investors.
