Slowdown in RMB appreciation to benefit dim sum market

The realisation during the past few months that the renminbi is not a one-direction currency that will appreciate for all eternity initially sent shockwaves through the markets as international investors suddenly had to factor in potential currency risk when making renminbi-denominated investments.

But participants at a panel discussion about the offshore renminbi bond market in Hong Kong yesterday argued that this new situation could help the market to mature by putting more focus on credit risk. Until now, investors have viewed offshore renminbi bonds also referred to as dim sum bonds or CNH bonds primarily as a renminbi appreciation bet.

“People no longer talk about a one-way...