Wednesday, October 9, 2013

First RMB-Bond Index ETF (Stock Codes and

While Chinese central government has constantly been promoting international use of renminbi (short form: RMB, CNY, Yuan etc), Hong Kong successfully issued the first RMB-denominated bond Index ETF (Exchange-Traded Fund) in Asian region on 18 June. It is a flexible dual-currency index ETF with stock codes of for RMB currency counter and for HKD (Hong Kong Dollar) currency counter respectively on Hong Kong Stock Exchange (HKEx stock code:

The issuer of this new Renminbi-bond Index ETF is iShares from BlackRock, the biggest ETF manager currently in the world, with initial issue price set at RMB 35. At this initial issue price level, each lot cost was just RMB 3.5K as its board lots size is 100 fund units.

On its first trading day, this iShares index ETF share prices closed at RMB 34.9 for Renminbi currency counter (stock code: and HKD$44.2 for HKD currency counter (stock code: respectively, which were just very close to the initial issue price level.

This new RMB-bond index ETF aligns with the performance of its underlying and tracking index, which is the Citi RMB-Bond Capped Index (RCI). It is also a physically-backed Exchange-Traded Fund (ETF) that invests no less than 70% of its total capitals in investment-graded RMB-denominated bonds. According to its Index Fund (IPO) Prospectus, it intends to invest only in Renminbi-bonds with minimum bond maturity period of one year and minimum capital size of RMB 1 billion.

Since this iShares fixed-income index ETF consists of a highly-diversified basket of 92 offshore RMB dim-sum bonds, it does offer a good alternative investment opportunity for better risk management. By definition, dim-sum bonds refer to offshore Renminbi-denominated bonds that are issued outside mainland China. In fact, 'dim-sum' is a kind of popular Chinese tiny food in Hong Kong where offshore Renminbi-denominated bonds were firstly born. The term 'dim-sum' means that it usually has a much lower bond yield than similar fixed-income products in mainland China. Why lower bond yield offshore? It is because offshore Renminbi markets, particularly in Hong Kong, usually have large pool of Renminbi deposits in banks but lacks of investment channels. Offshore banks in Hong Kong can usually maintain lower Renminbi deposit rates to their customers than domestic banks in mainland China. Companies can thus raise money easily in offshore markets by issuing Renminbi-denominated 'dim-sum' bonds at lower bond yield than onshore market.

Nevertheless, this iShares fixed-income index fund (stock codes: for RMB currency counter and for HKD currency counter) does allow direct international access to the fast-growing RMB dim-sum bond market. Before similar type of ETF was available, individuals or non-institutional investors were restricted by PRC (People's Republic of China) rules and could not invest in such Renminbi-bond market easily.

Mr China Team - Anniversary

Hot news! Last Monday, September 30, all Mr China team members gathered at Beijing to celebrate our birthday of this site altogether. Mr China Blog is now 3 years young!

Happy Birthday to Mr China

Happy Birthday to Mr China

Although our blog is now ranked much higher in search engines than it was 3 years ago, we will not change our basic style and will still stick with our fundamental ideas for running this website. Source: Site Launch Day.

Taking this special birthday event, let us list out here our Top 10 Topics for the past year:

(1) Google AdSense;
(2) LGFV Loans;
(3) GDP Target;
(4) iShares A50;
(5) 1st iBond;
(6) 2nd iBond;
(7) CPI Target;
(8) PICC Insurance;
(9) CSOP A50;
(10) RMB ETF.

With great supports from our readers, we will put additional focus on popular topics regarding GDP (Gross Domestic Product), CPI (Consumer Price Index), ETF (Exchange-Traded Fund), bond market analysis, stock analysis etc based on the above top 10 list that our readers like so much. Of course, we will definitely not give up providing useful financial-related content on this blog, just like this article relating to Renminbi-bond index ETF (stock codes: for RMB currency counter and for HKD currency counter) that is useful for any investors interested in RMB dim-sum bond market investment opportunities.


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