Offshore yuan climbs to new record

    THE yuan traded outside China hit a record high yesterday, driven by seasonal yuan demand at the beginning of the year and increased bets on further currency appreciation.

    The yuan rose a solid 2.9 percent against the U.S. dollar in 2013 and traders see similar gains this year after the central bank promised to tone down its interventionist policies in the foreign exchange markets. A wave of structured-product selling by banks, the net result of which is the buying of the Chinese currency, also buoyed the yuan. The offshore yuan briefly hit 6.0345 in morning trade, widening its premium over the onshore yuan to 170 pips, compared with only 9 pips Jan. 2.

    Central banker urges trial of municipal bonds

    CHINA should allow cities to issue bonds directly to reduce local government debt and their reliance on shadow banking services, Xinhua quoted Pan Gongsheng, People’s Bank of China deputy governor, as saying Tuesday.

    “Whoever is responsible to repay debt should be allowed to issue debt,” Pan is quoted in the report. Most local governments in China are forbidden from borrowing directly. They get around this with companies known as the local government financing vehicles. China’s National Audit Office said last week that debt and guarantees issued by local governments had risen 67 percent to 17.9 trillion yuan (US$2.95 trillion) between the end of 2010 and the end of June.

    Neway Valve to list shares in Shanghai

    NEWAY Valve (Suzhou) Co., a major industrial valve maker, aims to raise up to 2.12 billion yuan (US$350 million) via an initial public share offering in Shanghai.

    Neway Valve aims to sell up to 120 million shares at 17.66 yuan apiece, the company said in a statement yesterday, meaning it would raise 2.12 billion yuan if it is fully subscribed.

    Macrolink invests in Malaysia, South Korea

    MACROLINK Real Estate Co. is planning to invest in tourism-related property projects in Malaysia and South Korea, becoming the latest Chinese developer to venture abroad.

    The Shenzhen-listed developer, which is a relatively small developer, will invest 154.7 million ringgit (US$47.1 million) in a Johor site in southern Malaysia and build a holiday resort. It didn’t say when the project would be ready. The firm is also investing 31.5 billion won (US$29.5 million) in a joint venture tourism project in South Korea’s Jeju Island.