HSBC RMB trade leads to RMB bond purchase

A Hong Kong businessman bought RMB-denominated bonds out of the renminbi equivalent of US$2.19 million he received via the renminbi trade.

The said businessman manufactures printed-circuit boards with production in Guangdong province, according to an HSBC statement.

"Under the current low interest rate environment, RMB bonds provide our business customers with an ideal option to diversify their investments. HSBC’s RMB capabilities in Hong Kong are helping our customers tap into the great opportunities in the Mainland," said Albert Chan, HSBC’s Head of Commercial Banking for Hong Kong.

The pilot programme, launched in July 2009, applies to trade between five designated Mainland cities − Shanghai, Guangzhou, Shenzhen, Dongguan and Zhuhai − and the Hong Kong Special Administrative Region, Macau Special Administrative Region and ASEAN member countries.

There were 66 transactions between Hong Kong and the Mainland, worth totaling US$6.26 million or RMB42.8 million, in the first month, according to the Hong Kong Monetary Authority.

Mr Chan added: "The RMB trade settlement scheme is still in the early stages. However, with the recent release of the names of about 400 Mainland enterprises that are eligible for the pilot programme, we expect that RMB trade settlement will increase as the scope of the scheme expands and more companies are able to participate."