BOC TO ISSUE RMB3BN BOND IN HONG KONG

Bank of China is to ask shareholders for permission to issue up to Rmb3bn ($392m) in renminbi bonds in Hong Kong, in what could be the first such issuance in the territory.
BoC said yesterday it would seek shareholder authorisation at its June 14 annual general meeting to sell “renminbi-denominated bonds in Hong Kong for an amount not exceeding Rmb3bn”.
It did not specify when a sale might happen.
In January, the Hong Kong and Chinese governments announced that mainland financial institutions would be permitted to issue renminbi bonds in the territory.
Last month, China Construction Bank signalled its intention to sell up to Rmb5bn in subordinated bonds in Hong Kong.
According to Haizhou Huang, at Barclay's Capital in Hong Kong, the launch of the first overseas renminbi investment vehicle was symbolically important.
“It's potentially a major step forward towards capital account liberalisation,” he said.
Hong Kong government and financial authorities had lobbied for the reform ever since the city's banks were allowed to accept renminbi deposits from local residents in 2003 and from selected businesses two years later.
The territory hopes to establish itself as an offshore centre for renminbi business, as China experiments with measures to liberalise its closed capital account.
Hong Kong's renminbi pool remains small. According to the Hong Kong Monetary Authority, as of the end of March the territory's banks held just Rmb25.2bn in renminbi deposits.
Renminbi deposits have failed to take off in Hong Kong partly because interest rates remain paltry, as local banks are not allowed to re-lend deposits in mainland China. Banks and depositors are therefore expected to flock to higher interest-bearing bonds issued by the likes of BoC and CCB.
“Hong Kong banks are not allowed to invest their renminbi in a meaningful way,” Mr Huang said. “Bonds will help generate demand for renminbi and grow a more liquid market in Hong Kong.”

中国银行拟在港发行人民币债券

中国银行(BoC)将征求股东意见，允许其在香港发行至多30亿元人民币（合3.92亿美元）的债券。如获批准，将是内地金融机构在港发行的首只人民币债券。
中国银行昨日表示，将在6月14日举行的2006年度股东大会上征求股东授权，“在香港发行不超过30亿元人民币债券。”
该行并未具体说明债券的发行时间。
今年1月，香港特区政府和中国政府宣布，内地金融机构将可以获准在香港发行人民币债券。
上月，中国建设银行(CCB)暗示，有意在香港发行至多50亿元人民币的次级债券。
巴克莱资本(Barclays Capital)驻香港的黄海洲表示，在海外发行首只人民币投资工具，具有重要的象征意义。
“这可能是迈向开放资本账户的重要一步，”他表示。
2003年，香港当地银行获准可以吸收本地居民的人民币存款，2年后又获准可以吸收选定企业的存款。自那以来，香港政府和金融管理当局一直在游说中国政府进行改革。
随着中国推出开放资本账户的试验性举措，香港希望将自己打造成人民币业务的离岸中心。
香港境内的人民币资金规模仍然较小。香港金融管理局(HKMA)称，截至今年3月底，香港当地银行的人民币存款仅为252亿元。
由于相关政策不允许香港当地银行将人民币存款在内地进行转贷，因此香港人民币存款的利率很低，这是在港人民币存款未能大幅增长的原因之一。因此，如果中国银行和中国建设银行等内地银行发行收益率较高的附息债券，预计银行和储户将踊跃认购。
“政府不允许香港当地银行以一种有意义的方式将人民币用于投资，”黄海洲表示，“债券将有助于激发对人民币的需求，并在香港发展出一个流动性更高的市场。”