The RMB Handbook Trading, Investing and Hedging

Author: Hai Xin
Publisher: Risk Books
ISBN: 9781906348816
Published In: July 2012
Format: Paperback
Jurisdiction: International ? Disclaimer:
Countri(es) stated herein are used as reference only

Out of stock

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The Renminbi (RMB), the official currency of the People's Republic of China, is rising in importance in internal foreign exchange and other markets, receiving an increasing amount of attention from politicians, economists, traders, investors, and corporate hedgers. Before 2009, the Chinese renminbi had little to no exposure in the international markets, but this is about to change dramatically thanks to China’s decision to establish RMB as an international reserve currency.

The RMB Handbook provides a comprehensive review of the attitudes to and development of RMB, most importantly offering practical advice to different categories of end-users regarding the various financial instruments linked to RMB, and demonstrating how practitioners can make use of these to achieve their objectives (while working within the parameters of new regulations).

The Chinese government has introduced a host of new measures to free the currency, making its intention clear: to make RMB a fully convertible currency and one of the major reserve currencies alongside the US dollar.

The RMB Handbook provides a comprehensive guide to the evolution of RMB, examining the issues relating to trading, investing and hedging of the Chinese renminbi against other currencies. Emphasis is placed particularly on the practical problems and solutions for investors, hedgers, traders, and speculators.

The book is divided into six main sections:

Background on the Chinese economy, banking system and capital market
Background on the Chinese RMB
Onshore FX Instruments and Market
Offshore FX Instruments and Market
Practical issues related to renminbi trading, hedging, and investment
Future Developments

The RMB Handbook is an essential guide for those who need to know exactly how they can capitalise on the restrictions being lifted, and how they can use financial instruments linked to RMB. After reading the Handbook, readers will be able to trade, invest and hedge Chinese renminbi. Practitioners such as traders, portfolio managers, research analysts, risk managers, treasurers, and finance directors wanting to stay ahead of the game will be brought completely up-to-date regarding the history, regulation, practice and future progress of the increasingly crucial RMB.

1   Background on Chinese Economy, Banking System and Capital Market
1.1   Introduction
1.2   The name of the currency
1.3   Renminbi notes and coins
1.4   A brief overview of the Chinese economy
1.5   A brief overview of the Chinese domestic banking system
1.6   A brief overview of the Chinese capital markets
1.7   Real estate market
1.8   Chinese investors investing offshore
1.9   Overseas investors investing in China
1.10   Cross-border borrowers and lenders
1.11   China's external financial assets
1.12   The reform agenda
1.13   The liberalisation of domestic interest rate
1.14   Summary

2   Background on the Chinese RMB
2.1   Introduction
2.2   History of renminbi exchange rate policy
2.3   Current exchange rate policy and implementation
2.4   Other institutions involved in RMB
2.5   Settlement systems
2.6   Offshore RMB
2.7   The links to renminbi
2.8   Foreign exchange management practice
2.9   Summary

3   Onshore FX Instruments and Market
3.1   Introduction
3.2   Regulations
3.3   The interbank market and CFETS
3.4   Renminbi spot
3.5   FX forwards and FX swaps
3.6   FX options
3.7   Cross currency interest rate swaps
3.8   Interest rate products
3.9   Onshore currency related products
3.10   Main players
3.11   Documentation
3.12   Main obstacles for the onshore market
3.13   Summary

4   Offshore FX Instruments and Market
4.1   Introduction
4.2   Non deliverable forward (NDF) and related products
4.3   Offshore deliverable renminbi (CNH) and products
4.4   Main Players
4.5   Documentation
4.6   Summary

5   Practical issues related to renminbi trading, hedging, and investment
5.1   Introduction
5.2   Trade settlement and hedging
5.3   Investment
5.4    Trading: banks and other financial institutions
5.5   Associated Risks
5.6   Information sources
5.7   Summary

6   Future Developments
6.1   Introduction
6.2   Capital account liberalisation
6.3   Reforming the renminbi exchange rate mechanism and interbank foreign exchange market
6.4   Renminbi internationalisation
6.5   Offshore renminbi trading centres
6.6   Current topics of discussion
6.7   Risk in the process of RMB internationalisation
6.8   Conclusion

Hai Xin

Hai Xin is a freelance consultant based in Hong Kong.

He had been a managing director and head of Asia Pacific at Overlay Asset Management (OAM), part of BNP Paribas group between 2005 and 2012. Before that, Hai Xin worked for the investment bank of UBS (and also previously for Swissbank Corporation, SBC Warburg, SBC Warburg Dillon Read, Warburg Dillon Read, and UBS Warburg) in a variety of positions: financial engineer within the Foreign Exchange division, advising corporations and institutional investors on currency hedging and investment issues; “permanent insider” within the Corporate Finance division, advising on currency risk management in cross-border merger and acquisition transactions; originator within Equity Capital Market Group dealing with Hong Kong and overseas initial public offerings (IPOs) as well as equity block trades by Chinese companies. Prior to joining UBS he worked as a researcher at AstraZeneca Treasury and as a relief producer for various current affairs programmes at the BBC World Service. Before leaving for Hong Kong, Hai also opened his own tofu factory based in the UK.

Hai obtained his PhD in quantitative finance from Imperial College, London, and an MSc in economics from the London School of Economics, both part of the University of London. His bachelor’s degree was in electronics and information science, from the University of Science and Technology of China.
Hai has been a visiting scholar of the Department of Finance at the Hong Kong University of Science and Technology since 2010, lecturing on statistics as well as investment banking.

Previously, Hai has published Currency Overlay: A Practical Guide (2nd edition, 2011) with Risk Books. Hai has also written three finance and investment books aimed at the lay reader in China: one being a general introduction to finance and investment, the other two about quantitative investment and high-frequency trading.