By SIOW LI SEN

[SINGAPORE] Banks herehandled deals worth overtwo billion yuan (S$411 mil-lion) yesterday as theyrushed to mark the start ofthe first RMB clearing facili-ty outside greater China.

Two offshore yuanbonds totalling 1.5 billionyuan were sold and othertrades worth aroundhalf-a-billion yuan tookplace as banks geared up toincrease their share of theRMB market before the fullliberalisation slated for2015.

The competition led tosome chest-thumping, withHSBC and Standard Char-tered both vying to claimpole position on the firstyuan bond issue cleared inSingapore.

Both banks claimed theprize for themselves.

Standard Chartered saidit sold a three-year one bil-lion yuan issuance througha Singapore-listed offshoreRMB bond. The three-yearsenior unsecured issuancewas priced with a couponof 2.625 per cent after get-ting over 3 billion yuan or-ders from 75 investorsacross Asia.

“With settlement of thebond set for May 31, thiswill be the first offshore

yuan bond that is listed,cleared and settled in Singa-pore,” it said.

Lenny Feder, StandardChartered Bank grouphead of financial markets,said that in the wake of onebillion yuan deal, “we antic-ipate increased interest insimilar transactions fromAsian companies, given thegreater ease of access toand familiarity with a Singa-pore-based clearing and set-tlement system.”

HSBC issued 500 millionyuan worth of two-yearfixed rate notes paying 2.25per cent and completedmore than 180 millionyuan worth of trade settle-ments.

“This issuance marksthe first RMB bond inAsean and coincides withthe historical start of yuanclearing by ICBC in Singa-pore,” said HSBC.

It follows on the HSBCgroup’s issuance in Londonof the first internationalRMB bond outside Chinesesovereign territories lastyear.

The RMB bonds weresold to a wide range ofAsian and European inves-tors, comprising fund man-agers, insurance compa-nies, private banks and oth-er banks, said KaitlynYang, HSBC spokeswoman.

On the trade settlementdeals, the transactions viathe new yuan clearing facili-ty were for a number ofcommodities customerssuch as R1 InternationalPte Ltd, Singapore Cogen-eration (Steel) Pte Ltd andJulong Group, added MsYang.

Matthew Cannon, headof global markets at HSBCSingapore said the fundsfrom the yuan bonds will beused to finance the bank’s

expansion of RMB-basedlending assets.

“This issuance will helpopen the market to other is-suers looking to fund them-selves internationally inRMB, offer new investmentopportunities to the sub-stantial pool of wealth man-aged in Singapore and as-sist in funding the rapidlygrowing RMB denominatedtrade business in Asia.”

Guy Harvey-Samuel,HSBC Singapore chief exec-

utive said yesterday’s RMBtransactions through thenew yuan-clearing facilityare part of “the bid to growthe range of RMB servicesto support the needs of ourcustomers for yuan-denomi-nated solutions and helpboost Singapore’s develop-ment as a regional RMBclearing centre”.

ICBC Singapore yester-day became the first Chi-nese bank to offer yuanclearing services outside

greater China. Until now,the Bank of China has beenclearing offshore yuan inHong Kong, Macao and Tai-wan.

Deutsche Bank yester-day said it handled severalyuan trade deals amount-ing to the equivalent ofUS$50 million for clients.

Beng-Hong Lee, Deut-sche Bank head of productmanagement for offshorerenminbi, expects the yuanbusiness to grow rapidly

due to Singapore’s positionas the region’s commodi-ties and trading hub.

Singapore is also a di-verse financial centre,home to the treasury cen-tres of many multination-als, said Mr Lee.

What’s exciting besidesthe bond issuances and cor-porate use for trade invoic-ing will be investor demandfor access into China’s as-set markets, he said.

“It’s creating exciting op-portunities formoney/fund man-agers. Singaporehas a global poolof liquidity and alot of fund man-agers are lookingto get more ac-tively involved inRMB assets,” hesaid.

Deutsche Bank esti-mates that foreign owner-ship of RMB fixed incometo grow to 4-5 per cent by2015 from 1.5 per centnow.

The German bank ex-pects the foreign institution-al investment scheme un-der which foreigner inves-tors buy Chinese stocks andbonds to reach 900 billionyuan in 2015 from 300 bil-lion yuan.

DBS Bank said it cleared

offshore RMB trade transac-tions worth around 280 mil-lion yuan through ICBC Sin-gapore yesterday for institu-tional clients and corporateclients in the commoditiesindustry.

“We also completed a re-mittance via ICBC Singa-pore to Hong Kong. Thereis considerable interestamong our customers to set-tle their RMB trades in Sin-gapore, and we have beenfielding client queries onthis,” said Lum Yin Fong,DBS global head of productmanagement.

OCBC Bank said it com-pleted its first RMB transac-tion through ICBC withmore to come later thisweek.

The Singapore Ex-change (SGX) yesterdaylaunched its depository ser-vices for RMB bonds, withStanChart’s RMB bond asthe first client.

SGX is also the world’sfirst exchange to offer theclearing of over-the-coun-ter foreign exchange for-wards for RMB, it said in astatement.

It added that SGX’s Chi-na A50 index futures pro-vides the only offshore ac-cess to the China A-sharemarket. In the last year, thevolume and open interestof the A50 futures have tri-pled with an average dailyturnover of US$1.5 billion.

By KENNETH LIM[SINGAPORE] SingaporePress Holdings (SPH) plansto list its retail properties inJuly to raise an estimated$1 billion in net proceedsand return 18 cents pershare in a special dividendto shareholders, the mediaand property group an-nounced yesterday.

SPH, which owns TheBusiness Times, is target-ing a $540 million initialpublic offering (IPO), includ-ing over-allotments of areal estate investment trust(Reit) holding the Paragonand The Clementi Mallshopping centres.

Industry publication IFRreported that Credit Suisse,DBS Bank and OCBC Bankare the bookrunners for thelisting.

SPH plans to retain astake of about 70 per centin the Reit, valuing the ini-

tial market capitalisation ofthe Reit at $2.2 billion.

The sale of those mallsto the Reit will raise net pro-ceeds of about $1 billion forSPH, after taking out trans-action costs and the dis-charge of encumbrancesand payments to minorityinterests. The Reit will alsobear a debt facility of about$900 million.

The proposed specialdividend will use about$291 million of the pro-ceeds, leaving about $757million that will be used forworking capital and to pur-sue “growth strategiesacross its property, mediaand other businesses”, SPHsaid.

Shares of SPH closed at$4.39 yesterday, up by 0.5per cent or two cents, be-fore the announcement.

SPH has received eligibi-lity to list approval from Sin-

gapore Exchange, and willseek shareholder approvalat a June 18 meeting.

The initial assets in theReit will be a 99-year-lease-hold interest in the freeholdParagon mall, valued at$2.5 billion; and a residual96-year-leasehold interestin The Clementi Mall, val-ued at $570 million.

SPH will inject the assetsinto the Reit for around$3.1 billion in considera-tion, comprising gross pro-

ceeds of about $1.4 billioncash and about 1.9 billionReit units.

SPH is also developing athird mall in Seletar, andplans to eventually injectthat asset into the Reitwhen it is completed, SPHchief executive Alan Chan

said at a media briefing.Mr Chan cast the move

as a way to unlock and re-lease capital from the retailproperties.

“These transactions willstrengthen the group’s bal-ance sheet through re-duced gearing and higher

net asset value per share,”he said. “Backed by a morerobust capital structureand substantial debt head-room, the group will be in astronger position to pursueour growth strategiesacross all our businesses.”

Assuming that the asset

transfers had been complet-ed on Aug 31, 2012, net as-set value per share wouldhave increased to $2.27from the original $1.39.Net gearing would have de-creased to 9.3 per centfrom 40.6 per cent. On apro forma basis, the Reit

would have had distributa-ble income of $115.9 mil-lion for the year ended Aug31, 2012.

Besides continuing to re-ceive a share of the distribu-tions from the assets, SPHwill also collect a fee asmanager of the Reit. Detailsof the fee structure werenot disclosed.

SPH had said as early asNovember 2012 that it waslooking into spinning off itsretail properties. Expecta-tions that such a movewould happen sooner rath-er than later picked upsteam in March when SPHreiterated its plans to hiveoff assets into a listed trust.

Media briefing:Mr Chan (centre),Ginney Lim, SPHexecutive vice-president, corporatecommunications &CSR, and groupcompany secretary;and Tony Mallek,SPH chief financialofficer, at the pressconference.

PHOTO: NEO XIAOBIN/ THE

STRAITS TIMES

Yuan clearing off to a fast start in Singapore

18 cts-a-share payout proposed; SPH to get $1.4bcash and 1.9b Reit units for Paragon, Clementi Mall

FOREXUS$ S$

US$ (S$ per US$) – 1.261

£ (US$/S$ per £) 1.514 1.909

EURO (US$/S$/€ ) 1.294 1.631

Foreign currency per US$ S$

YEN 101.00 80.10

RM 3.028 2.401

HK$ 7.763 6.157

BAHT 29.87 23.69

RUPIAH 9,798 7,771

RENMINBI 6.122 4.856

INDIAN RUPEE 55.60 44.10

A$ 1.036 0.822

NZ$ 1.234 0.979

MARKETSMonday Change

KL COMP 1,767.13 -5.93NIKKEI 225 14,142.65 -469.80HANG SENG 22,686.05 +67.38SET INDEX 1,593.10 -14.36JAKARTA COMP 5,085.14 -69.96MANILA COMP 7,097.51 -171.40SEOUL COMP 1,979.97 +6.52SHENZHEN B 863.14 +0.98MUMBAI IND 20,030.77 +326.44 12noon EDT ChangeDOW Closed –NASDAQ Closed –

SPH plans tolist retailReit in July

SGX says it is the world’s firstexchange to offer the clearing ofover-the-counter foreign exchangeforwards for RMB.

PROPERTYHouse of Tan Yeok Nee back on the marketPAGE 38

COMPANIESOrchard Hotel Shopping Arcade gets $25m revampPAGE 8

SME IncWinTech: Finding its niche in nanotechnologyPAGE 14

H ST INDEX3,391.30 (-1.87)

H ST INDEX FUTURES3,391.00 (-2.00)

H SIMSCI381.07 (-0.26)

G SIMSCI FUTURES381.30 (+2.10)

PRIME RATESSINGAPORE ................................... 5.38MALAYSIA .................................... 6.55HONG KONG ................................ 5.00INDONESIA ............................... 13.034TAIWAN ...................................... 5.036JAPAN ........................................ 1.475KOREA ........................................... 9.33BRITAIN ......................................... 0.50US .................................................. 3.25CANADA ....................................... 3.00SWITZERLAND .............................. 0.50INDIA ........................................... 14.45Source: Bloomberg

MARKETS DIGEST

THE BUSINESS TIMESS$1.00 online at http://www.businesstimes.com.sg CO REGN NO 198402868E MICA (P) 074/08/2012 Tuesday, May 28, 2013