Trading in yuan-denominated securities got underway on the Frankfurt Stock Exchange yesterday, hailed as the first such market outside China.
The platform, first announced during German Chancellor Angela Merkel’s visit to China last month, is to allow investors in Europe to trade securities denominated in the Chinese currency.
It is the first yuan market authorized outside China, said Han Chen, the platform’s joint chief executive officer.
“The first trades have already taken place in the early hours of market operations,” exchange operator Deutsche Boerse AG said in a statement, after the China Europe International Exchange or CEINEX, opened at 9am.
While other markets, such as London Stock Exchange Group PLC, have seen their own attempts to spur trading in a handful of listed yuan securities fall flat, Deutsche Boerse is trumpeting a key advantage that is likely help it succeed.
Unlike its rivals, the German venture is co-owned by two large Chinese firms, the Shanghai Stock Exchange and China Financial Futures Exchange, which might lend it the credibility it needs to win over investors.
For now, it offers trading in index-linked funds and “a wide range” of yuan-denominated futures, but more types of securities are to be made available, according to CEINEX.
Before CEINEX opened its doors, overseas investors had few yuan-denominated options. The London Stock Exchange (LSE) and Euronext stock exchange each had an exchange traded fund (ETF) tracking short-dated debt. LSE was first, starting in March and Paris-based Euronext followed at the end of June. Both firms plan to offer more yuan securities next year.
“We would envisage significant issuance to come in the future,” said Nikhil Rathi, chief executive officer of LSE’s stock-market business.
“I would expect quite a lot of developments in the next year,” Rathi said.
Additional reporting by Bloomberg
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