China Construction Bank and Commerbank launch RMB-denominated MM ETF in Paris

Jun 30th, 2015 | By | Category: Fixed Income

Euronext, the European stock exchange, has welcomed the arrival of the first European-listed, renminbi-denominated money market to its Paris market. The Commerzbank CCBI RQFII Money Market UCITS ETF, which has been listed to trade in renminbi or euros, offers exposure to the interbank bond market in Mainland China. The move highlights the growing activity of offshore renminbi trading in Europe.

China Construction Bank and Commerbank launch renminbi-denominated ETF in Europe

The listing of the first RMB-denominated ETF paves the way for future yuan offshore trading.

The ETF is the result of a collaboration between Commerzbank and China Construction Bank, with the management of the fund being undertaken by the latter.

Thomas Timmermann, CEO of Asset Management at Commerzbank Corporates & Markets, commented, “RMB is an increasingly important currency for investors and we are delighted to be able to broaden the reach of this product to French investors. We appreciate and recognise the importance of the French investor base in the internationalisation of the RMB. The ETF provides offshore investors the opportunity to use offshore renminbi deposits to invest in the mainland securities markets, with the aim of maintaining capital value and generating returns linked to the RMB money markets.”

Further to this, Jos Dijsselhof, Interim Chief Executive of Euronext, said, “We are delighted to welcome China Construction Bank, one of China’s leading commercial banks, as investment manager on ETFs now listed on our Euronext markets. The RMB is increasingly used in cross border transactions so this is an exciting step for Euronext as we continue to develop our offer in RMB denominated products and welcome Chinese investors to our market.”

China Construction Bank has also signed a ‘Memorandum of Understanding’ (MOU), a non-binding formal acknowledgement of partnership, with Euronext to enhance the bank’s future access to European markets. The MOU is expected to pave the way for future financing of Chinese firms in Europe as well as enable European exchanges such as Euronext to become leading international centres of offshore renminbi transactions.

Future developments may include China Construction Bank becoming a trading member of Euronext markets; ongoing access to Euronext products within China Construction Bank; and RMB payment and settlement structures.

Wang Hongzhang, Chairman of the Board of Directors of CCB said, “Developing offshore RMB business in Europe is one of the key elements in CCB’s internationalization strategy; the cooperation with Euronext marks another important historical milestone. We believe, not only does this allow us to gain further access to the European capital markets, internationalize our operations, and provide our clients with additional channels to invest in Euronext Paris, it will also encourage an extensive use of RMB products by French enterprises, financial institutions and investors, and ultimately drive the internationalization of the RMB.”

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