Barclays(US:BCS) 券商中国·2025-05-01 15:09Core Viewpoint - The offshore RMB bond market is experiencing significant growth, driven by various factors including increased issuance from the Chinese government and private institutions, as well as a favorable macroeconomic environment [1][3][5]. Group 1: Market Trends - The issuance of offshore RMB bonds is projected to reach a peak of 16,124 billion RMB in 2024, representing a 26% year-on-year increase from 2023 [3]. - In the first quarter of 2025, the issuance scale exceeded 3,780 billion RMB, marking a 53.7% increase compared to the same period in 2023 [3]. - The secondary market for offshore RMB bonds remains resilient despite global market volatility, with trading prices tightening by 15-20 basis points since early April [6]. Group 2: Factors Driving Growth - The Chinese Ministry of Finance has diversified its supply, establishing benchmarks for the market, including the issuance of green sovereign bonds in London and Hong Kong [3][4]. - There is a trend of longer maturities in bond issuance, with notable examples including Baidu's issuance of 10 billion RMB bonds and the Hong Kong Airport Authority's issuance of 10-year and 30-year bonds [4]. - The offshore RMB market is becoming more attractive for private institutions, which previously favored the US market for bond issuance [2]. Group 3: Changes in Issuer Landscape - The first quarter of 2025 saw new borrowers entering the market, issuing large-scale bonds, and structural innovations such as green bonds backed by multilateral institutions [4]. - The total issuance from international multilateral institutions reached 8.9 billion RMB in the first quarter of 2025, significantly up from 3.2 billion RMB in the same period of 2024 [4]. Group 4: Future Outlook - The issuance volume of offshore RMB bonds is expected to remain stable, with a significant portion being short-term deposits that will likely be rolled over [7]. - There is a potential shift of investor interest from US Treasury bonds to RMB assets, which could lead to increased inflows into the offshore RMB market [7]. Group 5: Policy Recommendations - There is a call for further development of cross-currency swaps and derivative markets to attract more foreign issuers [8]. - The implementation of proactive macroeconomic policies is deemed crucial to enhance investor confidence and participation in the offshore RMB market [8]. - Expansion of the "Southbound Pass" plan is anticipated to provide more diversified investment options for domestic liquidity and enhance the attractiveness of the offshore RMB market [8].