Offshore Yuan Trading Experts Workshop 2011, "The Emergence of the Yuan in the Global Foreign-Exchange Markets" - Hong Kong

 Offshore Yuan Trading Experts Workshop 2011

The Beginning of a New Era
The Emergence of the Yuan in the Global Foreign-Exchange Markets

Hong Kong: March 28th-29th 2011

"This is the beginning of a new era. This is a step moving to full convertibility of the yuan, and is a major change of the international financial landscape."
Norman Chan, Head of Hong Kong Monetary Authority

According to The Wall Street Journal, China's currency is emerging as a hot property in global foreign-exchange markets, just months after Beijing allowed the yuan to be bought and sold outside the mainland for the first time. In fact, daily trading in the yuan has grown from zero to $400 million in the past few months, as the currency of the world's second-biggest economy begins to flow around the globe. Global trading in yuan allows businesses to buy and sell the currency to finance trade, investment and borrowing. It's an important step for the yuan to play a role in global financial markets.

In July, Chinese regulators opened the door by letting banks and individuals freely trade yuan outside of mainland China for the first time. On Dec. 6, Chinese regulators broadened the scope of the program, increasing the number of exporters that can use yuan to trade their goods from a few hundred to nearly 70,000. Now foreign-exchange traders are embracing the currency as they see demand for yuan rising sharply. Bankers in New York, London and Tokyo are rushing to set up new trading systems and back offices to trade in yuan.

Some predict it will only be a few years before 20% to 30% of China's $2.3 trillion of imports could be conducted in yuan rather than U.S. dollars. Today less than 1% is done in yuan, according to Standard Chartered. Already, banks such as Citigroup Inc. and HSBC are offering investors yuan-priced options and interest-rate derivatives. The move has opened the doors to wider issuance of yuan-denominated bonds and other investments. McDonald's Corp. and Caterpillar Inc. recently became the first U.S. non-financial corporations to sell debt priced in yuan, in what is being nicknamed the "Dim Sum" bond market.

Program

1.       The Emergence of the Yuan in the Global Currency Scene

a.       The current system: the dollar era coming to an end?

b.      Ultimate role of the euro and yen

c.       Present and future dynamics of the yuan

2.       A New World of Investment Opportunities

a.       Dynamics in the CNH market, sources, liquidity, and relation with CNY amidst various measures

b.      CNH products: money market instrument and “Dim Sum” bonds

c.       Yuan trading in the foreign exchange world

d.      From plain vanilla structured deposits to interest rate swaps

e.      Reverse enquiries applied to the offshore yuan

3.       “Dim Sum” on the Capital Raising Menu

a.       Yuan-denominated Certificates of Deposit (CDs)

b.      Issuance of "dim sum” bonds

c.       No-yuan approaches to CNH-bond sales

d.      On the path to CNH-denominated IPOs

e.      Future development/hindrances

4.       What the Future Holds for the Yuan in the Currency Markets

a.       Long-term dynamics of the CNH and CNY curves

b.      Is the yuan really headed higher?

c.       Impact of imports and exports being settled in yuan

d.      What will take to make the yuan a fully convertible currency

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