Dim Sum Bonds E-Book

Hung-Gay Fung

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Finance Editions
• Sprache: Englisch

Seitenzahl: 315

Veröffentlichungsjahr: 2014

Beschreibung

A comprehensive guide to understanding and assimilating into dim sum bond markets The expansive growth of the dim sum bond market in the last five years has peaked investor interest and inspired companies to seek out investing opportunities that negate China's capital controls. In a four-pronged approach, Dim Sum Bonds examines the development of the dim sum bond market and its role in China's RMB internationalization policy, characteristics of dim sum bonds and its market, investors' investment objectives and the investment performance of dim sum bonds, motivations of issuers, and underwriters' roles in the dim sum bond market. You will familiarize yourself with every aspect of the dim sum bond market from an issuer, an investor, and an underwriter's perspective. Academics, financial advisors, investment bankers, underwriters, investors, and policy makers should not be without this informative and detailed guide to the offshore market central to China's internationalization of RMB. * Written by Hung-Gay Fung, Glenn Chi-Wo Ko, and Jot Yau, all of whom are experts on the dim sum bond market * Explains the rapidly expanding dim sum bond market and puts readers ahead of the curve * Landmark issues, Chinese banks (China Development Bank), Infrastructure, red-chip companies (Sinotruk), and multinational corporations doing business in China (McDonald's) are discussed in detail. Covering landmark issues from a variety of Chinese and multinational corporations, Dim Sum Bonds provides must-read manual to understanding the vast opportunities of this up-and-coming market.

Leseprobe

Contents

Cover

Praise for Dim Sum Bonds

Series

Title Page

Copyright

Dedication

Preface

ORGANIZATION OF THIS BOOK

Acknowledgments

Acronyms and Key Terms

Chapter 1: New Market—Developments, Opportunities, and Challenges

1.1 INTRODUCTION

1.2 OVERVIEW OF THE DIM SUM BOND MARKET

1.3 POLICIES SUPPORTING THE GROWTH OF OFFSHORE RENMINBI

REFERENCES

Chapter 2: Offshore RMB-Denominated Bonds—Dim Sum Bonds

2.1 DEFINITION

2.2 BOND ISSUE CHARACTERISTICS

2.3 CONCLUSION

REFERENCES

Chapter 3: Issuers

3.1 ISSUERS

3.2 CLASSIFICATION OF ISSUERS BY TYPE OF ORGANIZATION

3.3 CLASSIFICATION OF ISSUERS BY INDUSTRY

3.4 CLASSIFICATION OF ISSUERS BY DOMICILE AND BY DEAL NATIONALITY

3.5 MOTIVATIONS BEHIND ISSUERS

3.6 CONCLUSION

REFERENCES

Chapter 4: Investors

4.1 INVESTOR TYPE AND MIX

4.2 MOTIVATION

4.3 RISK/RETURN ANALYSIS

4.4 CONCLUSION

REFERENCES

Chapter 5: Investment Banks and the Dim Sum Bond Issuing Process

5.1 DIM SUM BOND ISSUING PROCESS

5.2 PRIMARY ISSUES

5.3 BOOKRUNNER/MANAGER RANKINGS

5.4 BOND ISSUING FEES

5.5 RETAIL VERSUS INSTITUTIONAL TRANCHES

5.6 CONCLUSION

REFERENCES

Chapter 6: Case Studies of Landmark Issues

6.1 LANDMARK ISSUES

6.2 CASE 1: THE FIRST DIM SUM BOND AND THE FIRST CHINESE FINANCIAL INSTITUTION ISSUER—CHINA DEVELOPMENT BANK (AND THE FIRST 15-YEAR AND 20-YEAR BONDS)

6.3 CASE 2: THE FIRST DIM SUM BOND ISSUED BY A CHINA-INCORPORATED FOREIGN BANK—THE BANK OF EAST ASIA (CHINA) LIMITED

6.4 CASE 3: THE FIRST DIM SUM BOND ISSUED BY THE CHINESE CENTRAL GOVERNMENT

6.5 CASE 4: THE FIRST DIM SUM BOND ISSUED BY A FOREIGN MULTINATIONAL CORPORATION—MCDONALD'S CORPORATION

6.6 CASE 5: THE FIRST DIM SUM BONDS ISSUED BY A SUPRANATIONAL AGENCY—ASIAN DEVELOPMENT BANK (AND THE FIRST 10-YEAR DIM SUM BOND)

6.7 CASE 6: THE FIRST DIM SUM BONDS ISSUED BY A CHINESE COMPANY, INCORPORATED OUTSIDE MAINLAND CHINA AND LISTED IN HONG KONG (RED-CHIP CORPORATION)—SINOTRUK (HONG KONG) LIMITED

6.8 CASE 7: THE FIRST MAINLAND CHINESE CORPORATION LISTED IN HONG KONG (H-SHARE) ISSUER OF DIM SUM BONDS—BEIJING CAPITAL LAND LTD.

6.9 CASE 8: THE FIRST PRC-LISTED (A-SHARE) ISSUER OF DIM SUM BONDS—GEMDALE CORPORATION

6.10 CONCLUSION

REFERENCES

Chapter 7: Conclusion

7.1 REVIEW AND PREVIEW OF THE DEVELOPMENT AND GROWTH OF THE DIM SUM BOND MARKET

7.2 MARKET PARTICIPANTS

7.3 ONGOING DEVELOPMENTS AFFECTING THE DIM SUM BOND MARKET

7.4 FINAL REMARKS

REFERENCES

About the Authors

Index

Praise forDim Sum Bonds

“A good 3-D view on the Dim Sum bond market—drilling down all the way from the macro factors that gave rise to this universe to the micro aspects of issuing details, while at the same time, providing a round-table perspective from the government, the issuers, the investors, and the investment banks.”

—Edwin Chan, Managing Director, Head of Asian Credit Research, UBS, and No. 1 ranked analyst for Asian G3 bonds by The Asset and FinanceAsia

“This book is a very useful reference for those international investors who consider investing in the offshore RMB bond market for either an appreciation or a higher carry in the RMB. It is also a convenient guide to the dim sum bond market. I highly recommend treasurers of companies who haven't tapped this important funding source read this book.”

—Jingxin Deng, Director, Lead Portfolio Manager of Global Credit Investment, China Investment Corporation, Hong Kong

“The dim sum bond market is not just another up-and-coming EM bond market. With the internationalization of the RMB and China being the second largest economy in the world, the dim sum bond market is quickly attracting investors and issuers from around the world. The growth (and the destiny) of the dim sum bond market, I believe, will be similar to the development of the Yankee bond market over the past 20 years. This timely and well-researched reference book written by both market practitioner and academic researchers is a must-read.”

—Thomas Kwan, Head of Fixed Income, Harvest Global Investments Limited, Hong Kong

“A very useful and insightful reference to anyone who wants to comprehend the profound implication of the development of the dim sum bond market and what it means to the global capital market in the future. I believe market participants and researchers will benefit from the authors' great insights, while investors will gain from better appreciation of the risks, opportunities, and the significance of this asset class.”

—Arthur Lau, Managing Director, Head of Fixed Income Asia ex Japan and Co-Portfolio Manager, Emerging Markets, PineBridge Investments Asia Ltd., Hong Kong, and voted the most astute bond investor in Hong Kong by The Asset in 2007 and 2008

“This book is essential reading for all existing and intended RMB debt market participants in Hong Kong, the biggest RMB off-shore centre.”

—Philip Li, Managing Director, China Chengxin (Asia Pacific) Credit Ratings Company Limited, and former chairman of the Hong Kong Capital Markets Association

“This book will help fill a gap in knowledge about the rapidly growing offshore Chinese Renminbi market and specifically the ‘dim sum' bond market in Hong Kong. This timely book will help investors, bankers, regulators, and academics better understand China's currency as it becomes more international and as companies look to raise funds in RMB via Hong Kong and other offshore financial centers.”

—George Long, CFA, Chairman, and Chief Investment Officer, LIM Advisors Limited, Hong Kong, the founding president of the Hong Kong Society of Financial Analysts, and the founding chairman of the Hong Kong Chapter of the Alternative Investment Management Association (AIMA)

“An excellent investment handbook on dim sum bonds for practitioners. The authors have great insights on the structure and evolution of the offshore RMB bond market.”

—Richard Mak, CFA, Head of Advisory Services—Asia, Pictet & Cie, and former president of the Hong Kong Society of Financial Analysts

“Kudos to the authors of this book for providing a very comprehensive source of information about the development of the dim sum bond market. As buy-side investment advisors for private banking clients in Asia, we see the trend of the growing importance of the RMB in asset allocation. The burgeoning demand for offshore RMB-denominated investments is a major driving force behind the dim sum bond market. I strongly recommend this book to anyone who wants to understand the dim sum bond market.”

—Maggie Tsui, Managing Director, Deputy Head of Investment Services, Asia, BNP Paribas Wealth Management, Hong Kong

“The rise of China has brought its capital markets into the global limelight. The internationalization and convertibility of its currency, the renminbi, are imminent. This book provides a very timely and comprehensive study of the dim sum bond market from both a historical and risk-reward perspectives. It also provides insights into how this asset class would continue to grow and the challenges it will face along the way. Fung, Ko, and Yau's book should be made a compulsory reading for any investor who has an interest in the renminbi and China's offshore bond market.”

—Michael Yong-Haron, CFA, Managing Director, Credit Suisse Private Banking Division, Greater China

“In Dim Sum Bonds, Fung, Ko, and Yau provide a fascinating account of the dim sum bond market from relative obscurity a few years ago to a leading position in the growing offshore RMB bond market. The book presents cases of the landmark dim sum bond issues, which illustrates clearly the issuers' perspectives. This book is a must-read for anybody who wants to know this market in Hong Kong.”

—Jimin Guo, Ph.D., CFA, Executive Director, China Galaxy Securities, Beijing

“Fung, Ko, and Yau have done a superb job in sizing up the development of the offshore RMB bond market to date and laying out the opportunities and risks ahead. The book is an indispensable reference tool for anyone investing or contemplating investing in this budding market.”

—David Lai, CFA, Investment Director, Fixed Income, Eastspring Investments (Singapore) Limited

“This book provides an easy-to-follow road map and delivers crystal clear details on every aspect of the dim sum bond market. It is a must-read for both seasoned professionals and novices alike.”

—Lee Kerk Phua, CFA, Chief Strategist, Phillip Mutual Malaysia

“Dim Sum Bonds offers insight into one of the more complex aspects of China's efforts to become a major player in global financial markets. It explains in detail the internationalization of the RMB and China's efforts to create an alternative global reserve currency. This book is a must-read for academics and practitioners interested in understanding the remarkable developments now taking place in China's capital markets.”

—Keith Ferguson, Chief Investment Officer, University of Washington, Seattle

“This book is an outstanding achievement that brings the reader into the world of dim sum bonds—the offshore renminbi bond market. The combined practitioner and academic experience of the authors is well translated into this book that gives not only a detailed overview of the dim sum bond market, but also a thorough quantitative analysis of the bond characteristics in this fledgling market. A must-read!”

—Wai Lee, Ph.D., Chief Investment Officer and Director of Research, Neuberger Berman, New York, and author of Theory and Methodology of Tactical Asset Allocation

“Fung, Ko, and Yau have authored a timely reference that sheds light on a nascent yet soon to be vital financial instrument in the global marketplace. The authors address the development of the dim sum bond market and its role in supporting the Renminbi as a global reserve currency in a way that is both entertaining and informative, both in breadth and depth. Readers, whether fixed income and equity professionals or investors, will find this book a useful desk resource today and even more so as the market begins to mature.”

—Derrick Tzau, CFA, International Research Analyst, Rainier Investment Management, Seattle/New York

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Copyright © 2014 by Hung-Gay Fung, Glenn Ko, and Jot Yau. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Fung, Hung-gay.    Dim sum bonds : the offshore renminbi (RMB)-denominated bonds / Hung-Gay Fung, PhD, Glenn Ko, CFA, and Jot Yau, PhD, CFA.    pages cm.—(Wiley finance series)    Includes index.    ISBN 978-1-118-43479-6 (cloth)—ISBN 978-1-118-83964-5 (ePDF)— ISBN 978-1-118-83963-8 (ePub) 1. Bonds—China. 2. Banks and banking, Foreign—China. 3. Renminbi. I. Ko, Glenn. II. Yau, Jot. III. Title.    HG4651.F86 2014    332.63′230951—dc23

2013035586

To my wife, Linda; my daughter, Anna; and my brothers and sister

—Hung-Gay Fung

To my family

—Glenn Ko

To Marie

—Jot Yau

Preface

As you are reading this preface, we know that the title of this book, Dim Sum Bonds, has done its job piquing your curiosity. We hope you will find this book interesting and “dim sum” meals satisfying.

Whenever we mentioned to our friends and colleagues that we were working on a book on “dim sum bonds,” all of them1 were in awe with no exception. Many of our friends, colleagues, and professional acquaintances thought that we had reinvented ourselves, switching our lifelong careers in finance/investment research and management to culinary art. A friend actually said to one of us,2 “I didn't know that you were a chef!” We are, of course, more than happy to explain, elucidate, and explicate what dim sum bonds are and will be. We wouldn't mind having this type of 3 “E's” conversations over “dim sum” luncheons for years to come.

“Dim sum,” in Cantonese3 refers to a variety of tiny, bite-sized, steamed food that is usually served for breakfast or lunch. It is supposed to be a small, hot meal that goes with Chinese tea. A traditional dim sum meal would have “Ha Gau” (shrimp dumpling) and “Siu Mai” (pork and mushroom dumpling), whereas fusion dim sum would have food crossing over from different Chinese regions as well as Western cuisines.