Central bank yuan bill issuance in HK oversubscribed by investors

China’s central bank on Tuesday issued 10 billion yuan ($1.41 billion) of bills in Hong Kong with a coupon of 2.21 percent.

The issuance was widely welcomed by overseas investors, with banks, central banks and funds among other institutional investors from the US, Europe and Asia, and international financial organizations actively participating in the subscription, the People’s Bank of China (PBC), China’s central bank, announced in a statement on its website.

The auction attracted bids of over 34 billion yuan, meaning the deal was oversubscribed 3.4 times. That indicates the strong allure of yuan-denominated assets for overseas investors, read the central bank announcement, and global investors remain confident in China’s economy.

A regular mechanism for the issuance of central bank yuan bills in Hong Kong has been gradually put in place since November 2018.

Tuesday’s issuance was supposed to roll over, according to the announcement, yet the outstanding central bank yuan bills in the city still hit 80 billion yuan following the issuance.

The stable and continuous issuance of PBC yuan bills in

Hong Kong is propitious to enriching high-credit-rating yuan asset portfolios and yuan liquidity management tools in the local market, thereby meeting the needs of offshore investors, improving the offshore yuan yield curve, pushing forward the offshore yuan market and advancing the yuan’s global push.

Additionally, EY on Tuesday pointed to an accelerating trend of secondary listings in Hong

Kong that offset falling IPO activity by deal numbers amid the COVID-19 outbreak.

The Hong Kong bourse saw an increase in proceeds fueled by the secondary listings of USlisted Chinese firms, with telecommunications, media and technology leading IPO activities in both deals and proceeds, EY said in a statement sent to the Global Times.