Latest News:  
Beijing   Cloudy/Overcast    0 / 5   City Forecast

People's Daily Online>>China Business

Baosteel issues bonds in HK to fund overseas units

By Fang Yunyu (Global Times)

08:41, November 28, 2011

Baoshan Iron & Steel Co (Baosteel), the country's largest steelmaker by crude steel output, announced over the weekend that it has successfully issued 3.6 billion yuan $564.87 million) worth of bonds in Hong Kong, which signals the government's determination to turn the yuan into a global currency. 

The issuance, the biggest yuan-denominated bonds by a Chinese company in Hong Kong, is aimed at injecting cash into overseas units of Baosteel, according to the company's announcement.

"The deal is part of an experiment to promote the yuan among overseas investors by using Hong Kong as a platform," Zheng Dong, a steel industry analyst at Guosen Securities Co, told the Global Times yesterday.

The move also shows the Shanghai-based company needs funds for its overseas iron and steel projects, Zheng noted.

Earlier in August, Zhou Xiaochuan, the country's central bank governor, said at a forum that the central government supports Hong Kong to become a center for offshore yuan business, and mainland companies will raise up to 50 billion yuan from bond sales this year in Hong Kong.

According to statistics released by the Hong Kong Monetary Authority on October 31, the region's yuan deposits grew by 2.2 percent to 622.2 billion yuan in September, compared to a month earlier.

However, due to Hong Kong's low deposit interest rate and the expectations of the yuan appreciation, yuan-denominated bonds have become popular among investors.

Previously, only the country's banks and Chinese companies' overseas arms were allowed to issue such bonds in Hong Kong. Baosteel was the first Chinese company to obtain permission of the State Council last month to raise money in such a way.

"Baosteel is devising a major strategy for the overseas market," Ma Zhongpu, chief analyst at steel research firm Umetal, told the Global Times yesterday,

Some analysts believe Baosteel may use the funds to acquire overseas resources or companies under control of foreign governments.

Email|Print|Comments(Editor:梁军)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Henan Province amends its family-planning policy

  2. Code blue alert renewed to warn fog in NE China

  3. Luxurious jewelry in Qing Dynasty

  4. Students learn folk culture at primary school

Most Popular

Opinions

  1. Corporate efforts better than govt ad in selling China
  2. Iceland deal hits local firms with dose of cold water
  3. Are Chinese people truly miserable?
  4. Protecting monetary sovereignty
  5. Think competitively
  6. Public anger hits the roof
  7. Zero-sum mentality should be ditched
  8. US expected to contribute to Asian economy
  9. No end in sight for economic doldrums
  10. China supports UN green industry initiative

What's happening in China

Students perform Chao opera at Guangdong

  1. Mother-to-child HIV/AIDS infection plunges
  2. First China-ASEAN Auto Expo to kick off
  3. China's industrial profits up 25 percent
  4. KFC to open in Sinopec gas stations
  5. Shanghai unveils official microblog to serve public

PD Online Data

  1. The lion dance in Guangzhou
  2. The flower fair in Guangzhou
  3. Lion dances pay New Year calls in Guilin
  4. Jiangsu´s special New Year traditions
  5. Hakka traditions in Spring Festival