First HKD-RMB Dual-Currency Share (Stock Codes: 80737.hk and 737.hk)
As there already have lots of offshore RMB-denominated IPO (Renminbi Initial Public Offering) launched, many investors might not clear about which one should actually be the world's first dual-currency share with RMB counter and why it was important for the development of offshore Renminbi investment market.
In fact, Hopewell Highway Infrastructure Ltd. (HHIL Stock Code: 737.hk for HKD currency counter), a tollway operator owned by Hong Kong property developer Hopewell Holdings (Stock Code: 054.hk) Wu Ying Sheung, had successfully launched its Renminbi-denominated IPO listing (HHIL Stock Code: 80737.hk for RMB currency counter) on 29 October 2012. Addition of this new Renminbi currency counter made HHIL the first HKD-RMB dual-currency share in the world. According to HKEx (Hong Kong Stock Exchanges) trading rules about dual-currency counters, its shares can be traded interchangeably between Hong Kong Dollars (HKD) and Chinese Renminbi (RMB). That means HHIL shareholders can convert their current HKD-denominated shares to new RMB-denominated ones, or vice versa. Hopewell Highway Infrastructure RMB IPO (Stock Code: 80737.hk) share placing price was set at RMB 3.22 per share.
This was the second Renminbi-denominated IPO listing in Hong Kong, just after another Hong Kong property developer Li Ka Shing launched the first-ever offshore Renminbi-denominated Hui Xian REIT (Real-Estate Investment Trusts) in Hong Kong (i.e.: outside mainland China) on 29 April 2011. Source: Hui Xian REIT.
Why this first HKD-RMB dual-currency share was important for the development of offshore Renminbi investment market? At least, symbolically, it had extended current lead of Hong Kong over Singapore as the top offshore RMB (Renminbi, CNY or Yuan) centre.
Li Ka Shing originally planned to launch Renminbi-denominated Dynasty REIT IPO by spinning-off from ARA Asset Management on 30 October 2012 in Singapore. Investment markets originally treated this SGD-RMB dual-currency IPO could become the first dual-currency share with Renminbi counter in the world. However, finally, such launch of Dynasty REIT Renminbi IPO on Singapore Exchanges was unsuccessful because of unfavorable market situation at that time. Concurrently, HKEx (Hong Kong Stock Exchanges) speeded up approval of Hopewell Highway Infrastructure Ltd. RMB IPO approval. This eventually made Hopewell Highway Infrastructure (HHIL Stock Codes: 80737.hk for RMB counter; 737.hk for HKD currency counter) the first dual-currency share with Renminbi counter in the world.
Offshore Renminbi deposits in Hong Kong already climbed to a new record of RMB 603 billion by end-2012 (as of December 2012). As a direct head-to-head comparison, offshore Renminbi deposits in Singapore had only RMB 100 billion during the same period. By now, overall size of offshore Renminbi centre in Hong Kong is still far more larger than that in Singapore.
Despite of this, it does not mean that Singapore cannot challenge Hong Kong as the key offshore RMB center. After all, Singapore is the fourth most active forex (foreign exchange) trading centre in the world and the second largest forex trading centre in Asia (just after Japan). That means except for Renminbi, Singapore is a much more active forex trading centre for other major currencies than Hong Kong. Therefore Singapore does have its unique advantages over Hong Kong especially in currency trading business. This makes Singapore a good potential candidate to challenge Hong Kong as the main offshore Renminbi trading center around Asia region.
To let you have a clearer picture about the overall development of offshore RMB business in Hong Kong as well as in Singapore, we will go through a bit more details for this topic with you in our coming article(s).
Again, Happy Chinese New Lunar Year of Snake to all of you!