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Dispatches: Growth of the dim sum bond

Financial experimentation in Hong Kong is providing investors with a new way to bet on Chinese currency appreciation: the “dim sum bond.” These bonds, denominated in Chinese yuan and issued in Hong Kong (thus the unofficial name), represent a tiny portion of China’s total local-currency debt. The amount raised so far this year is a mere $1.46bn, versus the $144.7bn worth of yuan debt issued inside mainland China, according to Dealogic. But there’s a key difference: Foreign investors, who are prevented from buying China’s domestic yuan debt by strict capital controls, face no such obstacles when it comes to dim sum bonds. (Wall Street Journal)

China Construction Bank yesterday says its third-quarter profit rose a better-than-expected 31 percent as it took advantage of improving interest margins.
(Shanghai Daily)

Japan’s leading securities groups reported slumping profits in the third quarter because of the severe downturn in their domestic retail business and continuing weakness in global equity markets. (Financial Times)

Australian Prime Minister Julia Gillard has signalled a warning to the coalition not to destroy bi-partisan support for foreign investment over the proposed takeover of the Australian Stock Exchange (ASX) by its Singapore counterpart. (Sky News)

Singapore Exchange’s (SGX) proposed takeover of its Australian counterpart would make the combined entity the Asia-Pacific region’s premier exchange-traded funds (ETF) hub, benefiting local financial planners. (Investor Daily)

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