RMB Product Usage and Market Trends
Usage of RMB products and services at record highs and product scope widens as RMB development is decoupled from local economic outlook
Chris Leung, Executive Director and Senior Economist of Group Research, DBS Bank (Hong Kong) Limited, said the speed, breadth and depth of RMB development in Hong Kong have improved and decoupled from local economic and business performance
Business Demand for RMB Rises in 4Q 2013
Business needs for RMB rebounded in 4Q 2013. The number of companies that had RMB customer orders/invoices in the last 12 months increased to 35% from 24% in 3Q 2013. Some 44% said that they would use RMB for these purposes in the next 12 months compared to 35% in the third quarter.
Usage of RMB products and services at record highs and product scope widens
Record Highs in RMB Services Adoption
A record 30% of companies said they are currently using or will consider using RMB payment and receivables services in the next 12 months, compared to 26% in the third quarter. Some 9% of companies, also a record high, said they are currently using or will consider using RMB trade services in the next 12 months, more than double the 4% recorded in the third quarter.
While most companies only used simple RMB spot conversion for their daily operations, companies using trade services showed growing interest in RMB investment, finance and hedging products. The percentage of respondents that had RMB investments in 4Q 2013 jumped to 8% from 1% in 3Q 2013. Some 7% of respondents had RMB financing in 4Q 2013, which was less than the 1% in 3Q 2013, while 12% of respondents were using RMB hedging products in 4Q 2013, versus only 3% in 3Q 2013.
DBS RMB Index and Market Sentiment
Nathan Chow, Vice President and Economist of Group Research, DBS Bank (Hong Kong) Limited, said the DBS RMB Index for VVinning Enterprises reading rebounded to 54.7 in the fourth quarter of 2013, amid increasing business needs for RMB by local corporations. Corporate use of RMB products and services at record highs and product scope widened
Corporate usage of RMB is decoupled from local economic and business outlook
RMB Development Amidst Economic Uncertainty
“The general improvement in the usage of RMB services and products in the fourth quarter came despite findings showing slightly poorer business performance in the previous 12 months and a more pessimistic business performance outlook for the next 12 months. This means that the speed, breadth and depth of RMB development in Hong Kong hinge on factors other than local economic and business performance,” said Chris Leung, Executive Director and Senior Economist, Group Research, DBS Bank (Hong Kong) Limited.
“To put this into perspective, the fourth-quarter survey revealed that the initiation of RMB trade settlement is equally split among the Hong Kong companies, their overseas customers and their suppliers. This means that the preferences of overseas players also made a significant contribution to the RMB development of Hong Kong,” Chris Leung said. “As Hong Kong is an open economy, its offshore RMB development should be evaluated in the broader context of international RMB development.”
DBS releases the findings of DRIVE on a quarterly basis. Fieldwork for the 4Q 2013 report was conducted through telephone interviews with the business owners and decision makers of over
200 companies in Hong Kong.
