Offshore renminbi bond index launches

DumplingS&P Dow Jones Indices and Deutsche Bank have co-branded the offshore renminbi bond index, S&P-DB Orbit Index.

China has a $3.3 trillion (€2.6 trillion) domestic bond market, according to a recent assessment by Standard & Poor’s Capital IQ, making it the third largest after that of the US and Japan.

This compares to a $50 billion offshore bond market, the ‘dim sum’ bond market, nicknamed after the popular Hong Kong dish. While the offshore bond market is just a fraction of the onshore bond market, it has grown rapidly in recent months.

Last year, more than half of the new issues of renminbi-denominated bonds in Hong Kong were from foreign entities.

The S&P-DB Orbit Index is intended to offer market participants a measure of the offshore renminbi-denominated bond market’s performance. It is a rules-based index based on Deutsche Bank's existing Offshore Renminbi Bond Index Tracker, a tradeable market benchmark index. 

In a joint statement, the companies said the Orbit index had been designed to be a transparent, liquid and replicable benchmark for offshore renminbi. It employs an active two-way pricing, tracking bonds and certificates of deposit with a minimum issuance size of renminbi 1 billion (€120.7 million) and at least 12 months to maturity.

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