DBS RMB Index for VVinning Enterprises 星展人民幣動力指數

Transcription

1 16 February 2015 DBS RMB Index for VVinning Enterprises 星展人民幣動力指數 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.

2 Composite index of a basket of parameters The RMB Index Company Business Performance Business Needs on RMB RMB transactions in Trade Service & Payment Receivables Access to RMB Finance Note: Target respondents had been changed to include business establishments with annual sales turnover of HK$1M or above starting from 1Q14 in order to focus on companies with relevant RMB usage. Weighting for each index parameter was updated based on data collected from 4Q12 4Q Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 2

3 DRIVE key component results summary 1. Business performance and outlook Improve by over 10% Improve by 5-10% No change (+/- 5%) Slow down by 5-10% Slow down by over 10% Don't know/ not sure Past 12 months Performance 12% 1 Next 12 months Performance 2 42% 42% 17% 19% 1 2. Usage of RMB Customer Orders & Trade Settlement Used in P12M/ Will use in N12M Do not use/ Will not use Unsure Past 12 months Usage 29% 70% Next 12 months Usage Usage of RMB Payment and Trade Services 4. Ease of access to RMB credit facilities Usage of RMB payment and receivables Usage of RMB trade services Very easy Slightly easy 1 Easy: 1 Currently using or will consider in N12M 32% 28% 10% 8% Neither easy nor difficult 55% No need for this product Slightly difficult Very difficult Don't know/ not sure 14% Difficult: 1 Currently using or will consider in N12M 32% 3

4 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents. Index findings in detail

5 Business performance deteriorated; outlook improved Business Performance in Past 12 Months Business performance in NEXT 12 months Q3/14 Q4/14 9% 12% 22% 1 Q3/14 Q4/ Improved by over 10% 38% 42% Improved by 5-10% No change (+/- 5%) 39% 42% 14% 17% 1 1 Slowed down by 5-10% Slowed down by over 10% Don't know/ not sure 1 19% 1 4% (n=210) (n=212) Base: All respondents (n=210) (n=212) Q15. How would you describe the business performance of your company in terms of sales turnover in the past 12 months? [Index component] Q22. How would you expect the business performance of your company in terms of sales turnover in the next 12 months? [Index component] 5

6 Less positive outlook for RMB customer orders/invoices Change in RMB customer order/ invoices and trade settlement in P12M Change in RMB customer order/ invoices and trade settlement in N12M Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 40% 3 45% 44% 29% Used in P12M/ Will use in N12M 5 52% 69% % % 70% 2% (n=172) (n=209) (n=210) (n=210) (n=212) Do not use/ Will not use Unsure Base: All respondents 28% 42% 45% 42% 4 5% 2% (n=172) (n=209) (n=210) (n=210) (n=212) Q17. How would you describe the changes of your customer order/ invoices settlement or trade settlement in RMB in the past 12 months? [Index component] Q23. How would you describe the changes of your customer order/ invoices settlement or trade settlement in RMB to change in the next 12 months? [Index component] 6

7 RMB product usage has increased slightly Overall RMB product usage Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 34% 25% 34% 28% 29% Used any RMB products in P12M 6 75% 6 72% 72% Did not use any RMB products in P12M Base: All respondents (n=172) (n=209) (n=210) (n=210) (n=212) Q49a. Which of the following RMB products are used by your company? 7

8 Usage of RMB payment & receivables and trade services Usage of RMB payment and receivables Usage of RMB trade services Q1/14 (n=189) Q2/14 (n=190) Q3/14 (n=198) Q4/14 (n=194) Q1/14 (n=190) Q2/14 (n=196) Q3/14 (n=200) Q4/14 (n=197) 24% 32% 20% 28% Currently using or will consider in N12M 5% 8% 4% 10% Base: All companies (Excluding don t know/ unsure) Q49a. Which of the following RMB products are used by your company? How about in the next 12 months? Is it because there is no such need for this product for your company business? [Index component] *Note: The question is revised in W2. 8

9 Interest in RMB finance products is still muted Intention to apply for RMB Finance in the next 12 months Reasons for not applying RMB Finance in the next 12 months Yes Company does not need RMB / mainly use other currencies (e.g. USD / GBP / Euro) 65 % No 97% Loan is not needed (e.g. has sufficient capital / stable business) 41 % No business/ trading in Mainland China 7% Base: All respondents (n=212) Base: Companies quite unlikely/ very unlikely to apply for RMB financing in N12M (n=204) Q49a. Which of the following RMB products are used by your company? How about in the next 12 months? (RMB Finance) Q42. Why do you think you are Very/ Quite unlikely to apply for RMB financing in the next 12 months? 9

10 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents. Other findings

11 RMB depreciation expectations are increasing Expectation on RMB vs. USD Q4/13 (n=172) Q1/14 (n=209) Q2/14 (n=210) Q3/14 (n=210) Q4/14 (n=212) 1 8% 3 17% 5 2% 32% 5% 28% 3 18% 8% 14% 2% 1 44% 4 39% 8% 12% 2 2% 15% 15% 1 Appreciate 64% 44% 20% 34% 32% Depreciate 4% 10% 2 9% 14% Base: All respondents Q27. How would you foresee the direction of RMB appreciation or depreciation against the USD in the next 12 months? 11

12 Companies using trade services use RMB products more Usage and needs for RMB products (Excluding Don t know/ unsure) RMB Deposit RMB Payment and receivable RMB Trade services RMB Investment RMB Hedging products Currently using Not currently using but will consider in next 12 months 55% 47% 9% % 10% 89% 87% No need for this product 42% 44% 57% Base: Base: Companies using trade services (Excluding Don t Know/ Unsure) Q49a. Which of the following RMB products are used by your company? How about in the next 12 months? Is it because there is no such need for this product for your company business? 12

13 Interested in a broader range of RMB products RMB products used/ intent to use FX Spot 30% 29% RMB Term loan 12% RMB Letter of Credit 1 RMB Saving and cheque account 5% 8% RMB products used in the past 12 months RMB Denominated Structured Investment Deposit 9% 8% RMB products intent to use in the next 12 months Base: Companies which used RMB products (n=72), Company intent to use RMB products in N12M (n=82) Q67. Which RMB product has your company used in the past 12 months? Which RMB product would you use in the next 12 months? 13

14 Increasing popularity of RMB loan and L/C in past 5 waves RMB products intent to use in the next 12 months Q4/13 (n=77) Q1/14 (n=70) Q2/14 (n=96) Q3/14 (n=77) Q4/14 (n=82) FX Spot 42% 42% 3 22% 29% RMB Term loan 5% 7% 5% 12% RMB Letter of Credit 9% 5% 9% 1 RMB Saving and cheque account - 2% - 8% RMB Denominated Structured Investment Deposit 1 12% 8% 8% RMB insurance and MPF 2% 8% Other Currency Linked to RMB Structured Investment Deposit 5% 5% 5% 10% 8% Deliverable Forward 4% Q67. Which RMB product has your company used in the past 12 months? Which RMB product would you use in the next 12 months? 14

15 Over half are satisfied with the RMB reflow mechanism Sufficiency of RMB Reflow Mechanism Overall RMB Reflow mechanism RMB Saving Products RMB Investment Products RMB Treasury Products Sufficient Insufficient 50% 74% 65% 48% Don t know / Not sure 24% 24% 2 28% 2 10% 24% Base: Companies using RMB customer invoice/ order (n=70) Base: Companies which think RMB reflow mechanism is either sufficient or insufficient (n=50) Q89. Do you think the current RMB reflow mechanism is sufficient? Q90. Do you think that the RMB reflow mechanism is sufficient in the product types listed below? 15

16 The removal of the RMB 20,000 cap of daily conversion limit is effective in stimulating personal RMB investment Consideration of RMB investment after the removal of $20K daily conversion limit Increment of RMB investment after the removal of $20K daily conversion limit Below 10% 32% Don't know 8% 1-20% 42% No 45% Yes 47% 2-30% % More than 40% 8% Base: Respondents who have personal RMB investment (n=62)/ Respondents who would invest in RMB product after the removal of RMB daily conversion limit (n=30) Q96. With the removal of RMB 20,000 per person per day conversion limit on Hong Kong residents, would you consider to increase your personal investment in RMB products? Q97. What is the percentage of your investment in RMB products are you going to increase? 16

17 The outlook for DRIVE and offshore RMB Economic slowdown in Hong Kong and China will exert downward pressure on DRIVE in 1Q15 Short term instability shouldn t alter the longer-term course for RMB internationalization and the development of offshore RMB markets China is seeking to provide domestic residents with more investment channels: Works for Shenzhen-Hong Kong Stock Connect are reportedly underway Mainland citizens will be able to buy overseas equities and real estate Give locals access to RMB capital markets in Singapore and London via an RQDII scheme Cross-border RMB flows are more balanced as RMB internationalization matures; RMB will be increasingly accepted as a trading and investment currency 17

18 Market Outlook on Offshore RMB investment products by Tommy Ong Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents.

19 Offshore RMB investment products The implied volatilities of USDCNH/HKDCNH have moved up in past 12 months, leading to higher yield in Currency-linked products. With the uplift of RMB20,000 daily exchange limit, CNH CLI volume went up sharply, the CNH CLI volume now accounts for roughly 10% of the total CLI volume in bank USDCNH 3month implied vol (Source: Bloomberg 02/11/2015) The uplift of daily exchange limit has also driven up demand in CNH quanto ELI/ELN, customers now can buy back the CNH in one lot on liquidation of the received stock 19

20 Offshore RMB investment products Customer demand in A-share ELN however is lukewarm, A-share investors tend to look for capital gain rather than yield enhancement The USD (HKD) forward premium against CNH enabled banks to structure CNH forward-linked deposits(notes) that paid higher interest coupon. Banks also are attracted to launch this product because it provide HKD (USD) funding. USDCNH 6month forward points (Source: Bloomberg 02/11/2015) 20

21 Offshore RMB investment products Shanghai-HK Stock Connect Refinements: o North bound, quota increase, custodian arrangement and payment o South bound, lower entrance requirement, widen investible stocks Product scope o Exchange listed bonds o ETF o Extension to Shenzhen Inverted CNH swap curve makes long term interest rate derivatives products unattractive (Source: Bloomberg 02/11/2015) CNH IRS 3M Swap curve 21

22 Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. DBS Bank accepts no liability whatsoever with respect to the use of this document or its contents. Methodology

23 Research methodology Target Respondents Sample Size Business decision makers Account or finance director/ manager, business owners who are involved in the choice of financial service providers for the company W9: n = 212 companies (202 SMEs + 10 corporates) SME: Companies with annual sales turnover HK$1 million - 1 billion Corporate: Companies with annual sales turnover of HK$1 billion or above Interview Method Telephone interview Fieldwork Period W Q4 : 10 Nov Dec 2014 Weighting The final sample structure is weighted based on the business establishment information from the Census and Statistics Department Special note From W6, minimum requirement for companies annual sales turnover had been raised to HK$1M or above Note: Figures in this report may not be proportionally calculated due to weightings applied 23

24 Parameter Weightings In 1Q 2014, minimum requirement for annual sales turnover had been raised to HK$1M or above in order to target business establishments relevant to RMB usage. Weightings were revised based on data collected from 4Q 2012 to 4Q 2013 for business establishments with annual sales turnover HK$1M or above. With the updated weightings, more emphasis was assigned to the Business Needs on RMB and RMB Transactions to reflect overall RMB needs and usage in the HK commercial sector. Company Business Performance Business Needs on RMB Access to RMB Finance (Q25) P12M Company business performance (Q15) N12M Company business performance (Q22) P12M change of RMB customer order/ invoices (Q17) N12M change of RMB customer order/ invoices (Q23) RMB transactions in Trade Service & Payment Receivables (Q49a) Original parameter weightings Updated parameter weightings 18% 9% 17% 9% 20% 29% 22% 27% 10% 5%

25 Index calculation The DBS RMB Index for VVinning Enterprises (DRIVE) Weighting is assigned to each option and transform into a scale of For Example: Improve by over 10% Improve by 5-10% No change Slow down by 5-10% Slow down by over 10% Currently using RMB trade settlement service Currently not using RMB trade settlement service but will consider N12M No need for RMB trade settlement service