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- Comprehensive offering for investments in China
- Clearstream’s Chairman, Jeffrey Tessler, sets continued focus on Asia
Clearstream is currently working on several initiatives in order to support the opening of the Chinese capital markets. “China has been a crucial part of Deutsche Börse’s strategy for a long time now, and we have had a strong presence in Asia for many years”, said Clearstream Chairman and member of the Deutsche Börse Executive Board Jeffrey Tessler. “I think it’s clear that we’re currently in the midst of a rare convergence of both internal reform of the onshore Chinese market and international recognition of the importance of the RMB. From a domestic perspective, there’s been a flurry of progress in liberalisation reforms over the last twelve months. This has been mirrored by moves internationally to increase the global role of the RMB.”
Signs of this international recognition include the International Monetary Fund’s decision to include the RMB in their Special Drawing Rights reserve currency basket with a weighting of 10.92 percent, the third highest weighting after USD and EUR. As a consequence central banks and other investors are expected to shift parts of their assets to China. “This is also due to the high likelihood that RMB-denominated China A-shares will be included in the MSCI and FTSE benchmark indices”, Tessler said. Likewise, Chinese bonds are expected soon to join some global emerging market indices.
“We at Clearstream are adapting our services in order to make sure our customers can fully take advantage of the new opportunities as the market opens up”, continued Tessler. Clearstream provides a holistic offshore RMB offering, including a variety of Hong Kong-based services. At present, Clearstream is the sole ICSD to offer settlement and custody services of China A-shares listed at Shanghai Stock Exchange via the Shanghai-Hong Kong Stock Connect scheme. This service will be enhanced on 4 July 2016 to allow Clearstream customers to benefit from true delivery versus payment settlement via the linkage.
Clearstream is also dedicated to exploring options to provide access to onshore RMB products for its customers. The ICSD also is currently in the process of developing a link to the Chinese Interbank Bond Market (CIBM), the third biggest fixed income market in the world with over USD 7 trillion outstanding. The initial stage of this linkage, which is set to go live later this year, will allow eligible international investors to benefit from a simple ICSD method to access sought-after onshore RMB-denominated fixed income assets.
