April 3 - China said on Tuesday it will raise the total quota for its Qualified Foreign Institutional Investor scheme (QFII) by USD50bn to USD80bn China will also raise the Renminbi Qualified Foreign Institutional Investor scheme (RQFII), which allows investors to buy mainland securities using offshore yuan, by RMB50bn, according to a statement on the China Securities Regulatory Commission’s (CSRC) website. China is accelerating its approval process to allow more capital inflows via the QFII scheme as regulators try to boost the country's sagging markets amid worries of an economic slowdown in the world's second-largest economy. Increases in the RQFII program, in addition to helping prop up mainland equity markets, will help raise demand for offshore RMB furthering the Chinese government’s goal of RMB internationalization. (Reuters)

 

April 18 - HSBC Holdings launched the first offshore yuan-denominated bond, also known as a dim sum bond, priced outside China and Hong Kong with a three-year London-listed bond that raised USD320mm. The total size of the bond was relatively small, making it a largely symbolic issuance that demonstrates little more than Chinese support for the city’s development as a hub for the yuan. The bond issuance was a step in the right direction for London as it looks to position itself as a major trading center for RMB-denominated securities, but with just one security launched, the market has a long way to go before developing the necessary liquidity to support an actively traded market for yuan-denominated securities. (Wall Street Journal)

 

April 27 - China Investment Corp. intends to invest about USD200mm in a fund led by BlackRock to acquire assets overseas. Details about the fund's setup, including its management structure, are still being worked out, people familiar with the fund said, adding that it is unclear when the fund will be officially launched. The potential investment by CIC comes as the sovereign fund in recent years has accelerated investments into higher-risk assets. Alternative assets accounted for 21% of CIC's overseas investments at the end of 2010, according to the most recent data available, up from just 6% in 2009, while cash holdings plunged to 4% of its overseas portfolio from 32%. (Wall Street Journal)

 

April 29 - The China Securities Regulatory Commission (CSRC) has released new guidelines on rules for China’s initial public offering system in hopes of lowering overly high pricing of IPOs. The new guidelines, which have no set timetable for when they will go into effect, includes earlier discloser of preliminary prospectus from issuing companies, including individual investors to take part in the inquiry of new offerings (currently only institutional investors are allowed to make an offer in an IPO) and increasing the percentage of shares available to institutional investors (up from a maximum 20% to no less than 50%). In addition, CSRC will be allowed to require additional disclosure from companies whose planned pricing are 25% higher than the average level of similar firms and will remove the three month lock up period for institutional investors participating in an IPO. (Wall Street Journal)

 

April 29 - China's Shanghai and Shenzhen stock exchanges have each released proposed new rules for delisting poor performers from the exchanges. Under the new criteria, companies listed on the main boards whose net assets are negative for the last two consecutive years and companies whose operating revenue is lower than RMB10mm (USD1.59mm) for four consecutive years will be delisted. In addition, companies on the main boards whose accumulated turnover is lower than five million shares over the previous 120 consecutive trading sessions will be delisted. The Shanghai exchange also plans to delist companies whose share prices have been lower than their par value for 30 consecutive sessions, while the Shenzhen bourse's requirement is for 20 consecutive sessions. The proposed regulations should help deter investors from speculating on underperforming stocks as well raise the overall quality of domestically listed firms. (Wall Street Journal)

 

April 29 - According to China’s central bank, People’s Bank of China (PBOC), China will widen channels for capital outflows and push for a bigger role for its own currency in cross-border trade. The People's Bank of China also pledged to continue efforts to promote convertibility of the yuan under the capital account, although details of the central bank’s plan for increased convertibility were not released. (Wall Street Journal)