According to HSBC Holdings Plc., China’s economic burst may push global sales of offshore yuan-related structured products to $1 billion for the first time since last year.
This year, sales of yuan-linked notes have reached “a few hundred million dollars” in Asia alone. Monthly worldwide volume is increasing rapidly, already doubled since 2012, according to HSBC’s Selene Chong.
“The increasing popularity of the structured products will be coupled with an overall increase of interest in renminbi investments,” she said. “As people are becoming more familiar with renminbi and increasingly using it as a trade currency, this will create more investment needs.”
Candy Ho, head of renminbi business development for Asia at HSBC, added that offshore trading for the Chinese currency has boosted demand for additional products as well.
“At the end of the day, you’ll need to use market liquidity to hedge some of the risk,” Ho said. “We expect to continue to see investors looking for opportunities branching into structured products.”