Published On: Mon, Sep 15th, 2014

London Stock Exchange Group Signs MoU With China Construction Bank

London Stock Exchange Group (LSEG) on 11 September signed a memorandum of understanding (MoU) with China Construction Bank (CCB). The agreement, signed by LSEG CEO, Xavier Rolet and CCB Chairman, Hongzhang Wang, will see the two organisations enter a strategic cooperation and work together to expand each company’s access to UK, European and Chinese markets as well as promoting the development of the offshore RMB market in the UK.

The signing ceremony, held at LSEG’s Paternoster Square headquarters follows CCB’s designation earlier this year as the first clearing bank outside Asia for the Chinese currency and will help strengthen the fast-growing financial ties between London and China.

The MoU outlines several areas for closer collaboration with a particular focus on developing RMB-denominated products and boosting the liquidity for such products in UK and European markets. Within this framework, CCB intends through its affiliate, CCBI to launch multiple series of ETF products including the RQFII Money Market ETF, to be listed in London and provide UK investors the opportunity to invest into Chinese equity and fixed income markets.

Xavier Rolet, CEO, LSEG said: “China’s exceptional economic growth has fostered a deep and vibrant base of Chinese companies that have made great advances in accessing public capital markets both at home and overseas. We are fully committed to supporting the efforts of the Chinese and the UK Governments in developing an off-shore RMB market in London through innovation and partnership with CCB. Equity and clearing are the cornerstones for the expansion of a truly global market for Chinese companies and financial products. The agreement signed today will accelerate the writing of this exciting new chapter in the story of global finance.”

Hongzhang Wang, Chairman of China Construction Bank said: “China’s rapid economic development has encouraged Chinese enterprises to expand internationally, which in turn has promoted the internationalisation of the Renminbi. China Construction Bank, as one of China’s most influential multinational finance companies, will actively support Chinese entities as they expand into Europe, giving impetus to the steady expansion of the RMB internationally.

The signing of this strategic co-operation Memorandum of Understanding builds on CCB’s status as the UK’s designated RMB clearing bank, and is another important step in expanding CCB’s business scope within the UK financial arena. Mutual cooperation with London Stock Exchange Group will raise both parties’ international competitiveness and boost the development of London’s off-shore RMB market, and is an important milestone in the cooperation between China and the UK’s financial sectors.”

LSEG has a strong track record of supporting Chinese equity and debt issuance on its markets. 59 Chinese companies are quoted in London – 7 on the Main Market and 52 on AIM. In addition, there are 19 so-called dim sum bonds on London Stock Exchange’s markets, with an aggregate value of RMB 14 billion. This year, IFC, part of the World Bank Group and Bank of China issued bonds of RMB 2 billion and RMB 2.5 billion respectively.

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