Opportunities in RMB Fixed Income€¦ · Offshore RMB bonds are on average yielding 5.5%, while...
Transcript of Opportunities in RMB Fixed Income€¦ · Offshore RMB bonds are on average yielding 5.5%, while...
February 2016
Opportunities in RMB Fixed Income
Presentation only intended for professional investors as defined by MIFID.
Non contractual document.
2
Overview of RMB bond markets Section 1
Opportunities in RMB bonds Section 2
Market/Currency outlook Section 3
Portfolio strategy and fund details Section 4
Key risks and disclosures Section 5
Content
Non contractual document
Overview of RMB bond markets
4
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Jun
-97
Ma
r-98
Dec-9
8
Se
p-9
9
Jun
-00
Ma
r-01
Dec-0
1
Se
p-0
2
Jun
-03
Ma
r-04
Dec-0
4
Se
p-0
5
Jun
-06
Ma
r-07
Dec-0
7
Se
p-0
8
Jun
-09
Ma
r-10
Dec-1
0
Se
p-1
1
Jun
-12
Ma
r-13
Dec-1
3
Se
p-1
4
Jun
-15
Government (in RMB billions) Corporate (in RMB billions)
RMB bond markets have grown substantially in recent years
Sources:
1. Asian Development Bank, data as of September 2015
2. HSBC, data as of December 2015
-
100
200
300
400
500
600
700
800
Oct-
10
Jan
-11
Ap
r-11
Jul-1
1
Oct-
11
Jan
-12
Ap
r-12
Jul-1
2
Oct-
12
Jan
-13
Ap
r-13
Jul-1
3
Oct-
13
Jan
-14
Ap
r-14
Jul-1
4
Oct-
14
Jan
-15
Ap
r-15
Jul-1
5
Oct-
15
RMBbn
Size of the onshore RMB bond market1 Size of the offshore RMB bond market2
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Key characteristics of onshore and offshore RMB bond markets
Onshore Offshore
Bonds traded Mainland China Hong Kong, Singapore, London and Taiwan
Accessibility
Accessible on a restricted basis to certain foreign
investor types
Onshore institutional investors
Offshore institutions with QFII/RQFII/CIBM quota
Can be accessed by all offshore investors
Retail and institutional investors
No quota restriction
Accessibility
0246810
05
1015202530
So
vere
igns
Ba
nks
Industr
ial
Pro
pert
y
Fin
ancia
l
Quasi-
So
vere
ign
Te
chnolo
gy
Cyclic
al
Su
pra
natio
nals
Te
lecom
mu
nic
atio
ns
Utilit
ies
Oil
& G
as
En
erg
y
Weight Yield
0123456
05
101520253035
Po
licy b
ank
bill
So
vere
ign
Industr
ials
Fin
ancia
ls
Utilit
ies
En
erg
y
Ma
teria
ls
Consum
er
Dis
.
Oth
ers
Weight Yield
As of 31 Dec 2015
Yield (%) 5.25
Duration 2.57
No of securities 224
Market size (USDbn) 1071
As of 31 Dec 2015
Yield (%) 3.22
Duration 3.81
No of securities 11,924
Market size (USDbn) 5,8751
Note:
1. Exchange rate: USD/CNY = 6.4936
Source: HSBC Global Asset Management , HSBC Jintrust, ChinaBond, as of 31 December 2015
Market
composition
Size and
characteristics
Onshore China Bond – Sector breakdown Offshore RMB China – Sector breakdown
% of market cap Yield (%) % of market cap Yield (%)
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Practical differences between onshore and offshore RMB bond market
Trading on the exchange vs in the interbank market?
– RMB1K vs RMB10mil minimum lots
Trading and settlement on a Sunday?
T+1 only?
Wind vs Bloomberg?
So many AAA bonds?
Taxes
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Limited ratings and pricing differentiation in the onshore RMB credit market
Note:
1. The rating mentioned above refers to the local credit rating in China. The rating criteria and methodology used by Chinese local rating agencies may be different from those adapted by most of the established international credit
rating agencies. Therefore, the Chinese local credit rating system may not provide an equivalent standard for comparison with securities rated by international credit rating agencies
Source: ChinaBond, LHS credit quality breakdown as of 31 December 2015, RHS spreads as of 13 January 2016
0
50
100
150
200
250
300
Ma
y-1
4
Jun
-14
Jul-1
4
Au
g-1
4
Se
p-1
4
Oct-
14
Nov-1
4
Dec-1
4
Jan
-15
Fe
b-1
5
Ma
r-15
Ap
r-15
Ma
y-1
5
Jun
-15
Jul-1
5
Au
g-1
5
Se
p-1
5
Oct-
15
Nov-1
5
Dec-1
5
3Y AA Corporate Bond Yields - 3Y AAA Corporate Bond Yields
Spreads between low and high
quality bonds start to widen as
credit event cases increase
AAA (61.9%)
AA+ (19.0%)
AA (17.9%)
AA- (1.0%)
A+ (0.2%)
A & Below (0.1%)
Over 98% of the market is rated AA or above by local credit agencies, less than 2% is rated AA- or below
Published credit ratings are not useful for differentiating between different quality bonds
An increasing number of credit default events should continue to drive improved pricing differentiation in the market
Onshore corporate bond spreads Credit quality breakdown1
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Mapping local credit ratings to international equivalents (Unofficial mapping for reference only)
Note:
1. The table is provided for discussion purposes only. There is no official mapping to convert local rating into international rating. The rating criteria and methodology used by Chinese local rating agencies may differ from those
adopted by established international credit rating agencies. Therefore, the Chinese local credit rating system may not provide an equivalent standard for comparison with securities rated by international credit rating agencies
Source: HSBC Global Asset Management, December 2015
Local rating International rating (S&P)
AAA
AA+
AA
AA-
A+
A
A-
BBB+
BBB
BBB-
BB+
BB
BB-
B+
B
B-
CCC
AAA
AA+
AA
AA-
A+ and below
China onshore bonds are mainly rated by local
rating agencies, which have different standards to
international ones
Local rating agencies eg China Lianhe Credit
Rating, Dagong Global Credit Rating, Peng Yuan
Credit Rating, etc
If we try to map the local ratings to international one
by using China’s sovereign rating:
– S&P assigned AA- vs Local rating agencies rated AAA to
Chinese government
Reference rating conversion table¹
Sovereign rating
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Opportunities in RMB bonds
10
Core yields in China are high compared to international markets
Source: Bloomberg, HSBC, data as of 14 January 2016. Past performance is not indicative of future performance
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
China(onshore)
China(offshore)
Italy Spain UK US Belgium France Holland0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Belgium China(onshore)
China(offshore)
Chile CzechRepublic
Japan SouthKorea
Taiwan
10 year government bond yields of world’s largest
bond markets
10 year government bond yields of selected markets which
are rated AA- or Aa3
Compared to the 10 year bonds in the top 10 largest bond markets, China’s is highest
Amongst peers with same credit rating (AA- or Aa3), China’s yield is high
Yield (%) Yield (%)
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Offshore RMB bond market often offers higher yields
Same bond in different currencies Yield (%) on 25 Jan 2016
Total 3.75% 09/24/2018 (CNH) 4.95
Total 2.125% 08/10/2018 (USD) 2.18
Total 4.875% 01/28/2019 (EUR) 0.22
Same bond in different currencies Yield (%) on 25 Jan 2016
BPLN 3.95% 10/08/2018 (CNH) 5.50
BPLN 2.241% 09/26/2018 (USD) 2.36
BPLN 2.994% 02/18/2019 (EUR) 0.52
Source: HSBC Global Asset Management; Bloomberg, data as at 25 January 2016. The data presented is for information and illustration purposes only and is not intended as an offer or solicitation for the purchase or sale of any
financial instrument or investment strategy
Company 1: Total (bond issued on 12 Sep 2013)
Company 2: BPLN (bond issued on 2 Oct 2013)
Offshore RMB bonds are on average yielding 5.5%, while average duration is only 2.6 years
Bonds denominated in CNH tend to have higher yields, compared to bonds in other major currencies such as USD and EUR,
even when comparing the same issuer with very similar tenor
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Relative value analysis Global issuers
Source: HSBC Global Asset Management, as of November 2015. For illustrative purpose only and does not constitute investment advice or a recommendation to invest in any of the financial instruments and/or issuers mentioned above
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Access China with lower volatility
Note: Yields are as of 31 December 2015; Returns and volatility were calculated based on USD. Investment involves risks. Past performance is not indicative of future performance
Source: Bloomberg; BoA Merrill Lynch, JP Morgan; Barclays; HSBC Global Asset Management; Volatility calculated for the period from 31 January 2011 to 31 December 2015
Onshore Chinese Bonds
Asian Bonds
Asian IG Bonds
Asian HY Bonds
Asian Local Currencies Bonds
US IG Corp US HY Corp
US Treasury
EURO IG Corp
EURO HY Corp
EURO Sov
EM Hard Currency Corp
EM Local Currency Bond ex
Asia
EM Local Currency Bond
Barclays Global Aggregate
Offshore RMB Bonds
USD Chinese Bonds
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Onshore Chinese Bonds
US Equities
Global Equities
European Equities
APAC ex Japan Equities
Chinese A-share
Chinese Equities
Offshore RMB
USD Chinese Bonds
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
Investing in Chinese bonds since the beginning of 2011 offered great diversification benefit for investors who had exposure to
Chinese securities
Return vs volatility
Major fixed income markets Major equities markets
Cumulative return Cumulative return
Volatility Volatility
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14
Low correlation with other asset classes A good addition to existing portfolios for diversification
Source: Bloomberg, HSBC Global Asset Management; Correlation calculated in base currency, for the period from December 2012 to December 2015. The commentary and analysis presented in this document reflect the opinion of
HSBC Global Asset Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management. Consequently, HSBC Global Asset Management
will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document.
Offshore
RMB
Bond
Onshore
RMB
bond
Global
bond US bond EM bond
Asian
bond
US high
yield
bond
Asian
high
yield
bond
Offshore RMB Bond 1.00
Onshore RMB bond 0.06 1.00
Global bond 0.08 0.25 1.00
US bond 0.13 0.28 0.90 1.00
EM bond 0.43 0.28 0.49 0.40 1.00
Asian bond 0.48 0.28 0.74 0.78 0.71 1.00
US high yield bond 0.47 0.16 0.36 0.33 0.69 0.63 1.00
Asian high yield bond 0.69 0.24 0.37 0.36 0.76 0.83 0.77 1.00
RMB bonds have relatively low correlation with other credit markets
This suggests that an allocation to RMB bonds may help diversify portfolios, which is valuable in light of trends that indicate
market volatility will continue
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Lower onshore bond yields drives investor demand for offshore bonds
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Dec-1
2
Fe
b-1
3
Ap
r-13
Jun
-13
Au
g-1
3
Oct-
13
Dec-1
3
Fe
b-1
4
Ap
r-14
Jun
-14
Au
g-1
4
Oct-
14
Dec-1
4
Fe
b-1
5
Ap
r-15
Jun
-15
Au
g-1
5
Oct-
15
Dec-1
5
HSBC China Asian Local Govt Bond Average Yield
Source: Bloomberg, HSBC Research, as of 25 January 2016.
Any forecast, projection or target contained in this presentation is for information purposes only and is not guaranteed in any way. HSBC accepts no liability for any failure to meet such forecasts, projections or targets. For illustrative
purpose only.
Some Chinese companies have issued bonds in the onshore bond market to benefit from lower funding costs
Supply has been subdued in the offshore RMB bond market – a positive technical backdrop
Demand from onshore investors have picked, as higher yields are offered for similar bond securities
Market growth has slowed but the offshore market’s size remains healthy
Offshore RMB bond issuance slows in 2015 Onshore bond yields and funding costs decline
%
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If China is included, what might the world government bond index look like?
Source: HSBC Global Asset Management, Chinabond, Citigroup. Based on WGBI Index, January 2015. Any forecast, projection or target contained in this presentation is for information purposes only and is not guaranteed in any way.
HSBC accepts no liability for any failure to meet such forecasts, projections or targets. For illustrative purposes only
0.00
0.10
0.20
0.30
US
Chin
a
Jap
an
Fra
nce
Italy
UK
Germ
any
Sp
ain
Be
lgiu
m
Neth
erla
nds
Canada
Au
str
alia
Au
str
ia
Oth
er
25%
21%
18%
30%
6%
US
China
Japan
Europe
Others
The world government bond index does not cover China currently
If we include the Chinese onshore government bond market, it would account for around 21%
Hypothetical market weight of the WGBI Index (if China is included)
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Offshore RMB bonds have gained 12% in USD terms and 38% in EUR terms since its inception in December 2010
Offshore RMB has erased its gains against the USD since December 2010, but remains 23% stronger than the Euro
90
95
100
105
110
115
120
125
130
135
Dec-1
0
Fe
b-1
1
Ap
r-11
Jun
-11
Au
g-1
1
Oct-
11
Dec-1
1
Fe
b-1
2
Ap
r-12
Jun
-12
Au
g-1
2
Oct-
12
Dec-1
2
Fe
b-1
3
Ap
r-13
Jun
-13
Au
g-1
3
Oct-
13
Dec-1
3
Fe
b-1
4
Ap
r-14
Jun
-14
Au
g-1
4
Oct-
14
Dec-1
4
Fe
b-1
5
Ap
r-15
Jun
-15
Au
g-1
5
Oct-
15
Dec-1
5ChinaBond Composite Index HSBC Offshore RMB Bond Index
Performance of RMB bonds
Source: Bloomberg and HSBC Global Asset Management, data as of 25 January 2016. Investment involves risks. Past performance is not indicative of future performance
90
95
100
105
110
115
120
125
130
135
140
Dec-1
0
Fe
b-1
1
Ap
r-11
Jun
-11
Au
g-1
1
Oct-
11
Dec-1
1
Fe
b-1
2
Ap
r-12
Jun
-12
Au
g-1
2
Oct-
12
Dec-1
2
Fe
b-1
3
Ap
r-13
Jun
-13
Au
g-1
3
Oct-
13
Dec-1
3
Fe
b-1
4
Ap
r-14
Jun
-14
Au
g-1
4
Oct-
14
Dec-1
4
Fe
b-1
5
Ap
r-15
Jun
-15
Au
g-1
5
Oct-
15
Dec-1
5
CNYUSD CMPN Curncy CNYEUR Curncy
Performance of RMB bonds RMB exchange rate (rebased to 100 on 31/12/2010)
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Market/currency outlook
19
More decisive cuts in rates and reserve ratio are needed
Source: Fed, PBoC, BoE, ECB, BoJ, CEIC, HSBC, as of December 2015
The PBoC is still a long way away from the zero lower bound RRR cuts can unlock substantial amounts of liquidity
% % % % Global central bank policy interest rates China, required reserve ratio
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We expect fiscal policy to play an even bigger role going forward
Source: IMF, OECD, CEIC, HSBC, as of December 2015
While government debt in China is not high Ample fiscal ammunition is available
% % % of GDP % of GDP
RMBbn
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China’s infrastructure facilities are poor relative to its income level
Note: Stars suggest railway density in Seoul and Tokyo when Korea and Japan were at the same income level as China today
Source: OECD, HSBC, as of December 2015
Railway density (metres/square meters)
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RMB exchange rate has been strong since 2010
60
70
80
90
100
110
120
130
140
01-2010 01-2011 01-2012 01-2013 01-2014 01-2015
Australia Brazil China Euro area Japan Korea Switzerland United Kingdom United States
Source: BIS, December 2015. Past performance is not indicative of future performance
Real effective exchange rate (Rebased to 100 = Jan 2010)
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RMB expected to remain stable against Trade Weighted Index
26%
21%
15%
7%
6%
5%
4%
4%
4%
3% 3% 1% 1%
USD/CNY
EUR/CNY
JPY/CNY
HKD/CNY
AUD/CNY
CNY/MYR
CNY/RUB
GBP/CNY
SGD/CNY
CNY/THB
CAD/CNY
CHF/CNY
NZD/CNY85
90
95
100
105
110
115
Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 Jan/16
vs USD
vs EUR
vs JPY
CNY (CFETS weightings)
vs a basket of EM currencies
Rebased, Aug 2015 = 100
appreciation
depreciation
Note: EM currencies includes BRL, RUB, ZAR, INR and TRY
Source: Bloomberg, HSBC Global Asset Management, as at 20 Jan 2016. Past performance is not indicative of future performance. The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset
Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management. Consequently, HSBC Global Asset Management will not be held
responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document.
China has pledged to monitor newly adopted Trade Weighted Index (TWI) as reference for daily currency fixing rate
USD/CNY could see greater volatility, while the RMB against TWI is expected to remain relatively stable
RMB strengthens versus EM currencies Currency weighting in TWI
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24
RMB’s role in trade and investment settlement continues to grow
Source: PBoC, Ministry of Commerce, China Customs, HSBC, IMF, UNCTAD, SWIFT, December 2015. The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management on the
markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management. Consequently, HSBC Global Asset Management will not be held responsible for any
investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document.
…and will likely continue to expand until it matches China’s
economic power
RMB is used to settle over 25% of China’s trade and nearly
60% of China’s non-financial outward direct investment
% %
% %
% %
Proportion of China’s non-financial ODI settled in RMB
Proportion of China’s trade settled in RMB
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Long term importance of RMB
Note: SWIFT – Society for Worldwide Interbank Financial Telecommunication
Source: IMF, SWIFT, HSBC Global Asset Management, data at of March 2015. The commentary and analysis presented in this document reflect the opinion of HSBC Global Asset Management on the markets, according to the
information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management. Consequently, HSBC Global Asset Management will not be held responsible for any investment or disinvestment
decision taken on the basis of the commentary and/or analysis in this document.
0.4
0.5
0.6
0.7
0.8
0.9
0.9
1.3
1.4
1.8
1.9
2.2
2.7
7.9
28.3
44.6
0 10 20 30 40 50
DKK
ZAR
PLN
NOK
SEK
THB
SGD
HKD
CHF
AUD
CAD
CNY
JPY
GBP
EUR
USD
-
500
1,000
1,500
2,000
2,500
US China Germany Japan France UK
2010-14 average
IMF confirmed that the RMB will be included in the SDR currency basket, with a weighting of 10.92% (effective 1 October 2016). In
the long term we expect the decision to:
Promote much greater use of RMB in trade and financial transactions globally
Encourage an increase in global asset allocation and diversification into RMB assets
Improve market access and liquidity of domestic capital markets, as China will take measures to transition the RMB into an
effective reserve currency
Trigger positive long term development of Chinese bond markets, through further liberalisation of capital markets and financial
markets
China is one of the largest exporters of goods and services in
the world
The CNY is the world’s 5th most used currency in global
payments processed by SWIFT
USDbn
%
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Portfolio strategy and fund details
27
HSBC GIF RMB fixed income
Portfolio characteristics Fund
Modified duration 1.92
Yield to maturity 5.84%
The Fund invests in offshore RMB denominated fixed income securities
Launched: 25 October 2011
Size: USD138.25 million as at 31 December 2015
Note: Returns will be reduced after fees deduction. Investment involves risks. Past performance is not indicative of future performance.
-1.6
-0.2
-1.8 -1.8
1.6
-0.1
2.0
-0.1
2.8 2.8 3.1
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
1 month 3 months 6 months YTD 1 year 3 year (pa)
In USD terms In RMB terms
Gross returns %
Key features
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28
2.78
1.78
95.49
CNY (=offshore RMB) USD CNH
HSBC GIF RMB fixed income (cont’d) As at end of December 2015
13.37
27.79
20.01
5.67 4.46
24.19
4.51
0.00
5.00
10.00
15.00
20.00
25.00
30.00
AA A BBB BB B NR Cash
Fund
Weight %
Source: HSBC Global Asset Management 31 December 2015; Investment involves risks. Past performance is not indicative of future performance. Allocations is as at the date indicated, may not represent current or future allocation
and is subject to change without prior notice. Source: HSBC Global Asset Management and Bloomberg as of 31 December 2015; Returns are gross of fees. Inception date of the fund: 25 October 2011
%
Credit rating breakdown
Breakdown by currency
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29
HSBC GIF RMB fixed income (cont’d)
4.51
1.47
1.63
1.96
2.15
2.20
2.53
3.78
6.73
7.19
14.35
15.62
16.47
19.39
0.00 5.00 10.00 15.00 20.00 25.00
Cash
Sovereign
Telecom
Utility
Energy
Technology
Quasi-Sovereign
Oil & Gas
Cyclical
Bank Sub
Financial
Bank
Property
Industrial
Source: HSBC Global Asset Management 31 December 2015; Investment involves risks. Past performance is not indicative of future performance. Allocations is as at the date indicated, may not represent current or future allocation
and is subject to change without prior notice.
(%)
4.51% 0.40%
1.08%
1.11%
1.61%
1.67%
1.96%
2.13%
2.15%
3.62%
3.76%
4.12%
5.04%
15.28%
51.49%
0% 10% 20% 30% 40% 50% 60%
Cash
Mongolia
Australia
Sweden
Malaysia
Thailand
Japan
New Zealand
France
Russia
United Kingdom
S.Korea
Germany
Hong Kong
China
Sector allocation
Country allocation
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30
HSBC GIF RMB fixed income (cont’d)
Notes:
1. Date as of 31 December 2015
2. The above are for illustrative purposes only and does not constitute investment advice or a recommandation to invest in any of the financial instruments and/or issuers mentioned above
Source: HSBC Global Asset Management
Name Weight (%)
SINOCHEM OFFSHORE CAPITAL C 3.550 5/13/2017 2.74
BSH BOSCH UND SIEM 3.8% SNR 24/07/17 CNY'REGS 3.800 7/24/2017 2.71
CHINA CONST BK 4.9%-VAR SUB 12/11/24 CNY 4.900 11/12/2024 2.69
ZHUHAI DA HENG QIN CO LTD 4.750 12/11/2017 2.66
BP CAPITAL MARKETS PLC 3.950 10/8/2018 2.53
AUST & NZ BANK GRP 4.75%-STP SUB 30/01/25 CNY 4.750 1/30/2025 2.49
EXP-IMP BANK KOREA 3.625% MTN 27/01/2019 CNY10 3.625 1/27/2019 2.22
MAIKUN INVESTMENT CO LTD 4.500 6/6/2017 2.21
SPG LAND HOLDINGS LTD 5.500 1/23/2018 2.74
UNICAN LTD 5.600 9/18/2017 2.71
Top 10 holdings as at 31 December 2015
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Key risks and disclosures
32
Key risks
Investor should be reminded that investment in some of the developing Asian countries may involve special considerations and
risks. Political changes, government regulation, social instability or diplomatic development , etc. Could affect adversely the
economies of such countries or the value of the investment
Change of interest rate may affect the value of the investments. Bonds and other fixed income securities are more susceptible to
fluctuation in interest rate and may fall in value if interest rates change
The investments maybe affected favorably or unfavorably by exchange control regulation or changes in the exchange rates
The investments may have exposure in credit risk whereby investments in non-investment grade debt obligations involves a high
amount of risk. An issuer suffering an adverse change in its financial condition could lower the credit quality of a security, leading
to greater price volatility of the security
Investments made may have exposure in financial derivative instruments, such as futures, forwards and swaps, etc. Investments
in financial derivative instruments may involve a greater degree of risk than in case with conventional securities and may subject
to liquidity and counterparty risks
Currency movement and market condition may affect the value of investments
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Non contractual document 33
Important information
This presentation is distributed by HSBC Global Asset Management (France) and is only intended for professional investors as defined by MiFID.
It is incomplete without the oral briefing provided by the representatives of HSBC Global Asset Management (France). The information contained herein is subject to change without notice. All non-authorised
reproduction or use of this commentary and analysis will be the responsibility of the user and will be likely to lead to legal proceedings. This document has no contractual value and is not by any means intended as a
solicitation, nor a recommendation for the purchase or sale of any financial instrument in any jurisdiction in which such an offer is not lawful. The commentary and analysis presented in this document reflect the
opinion of HSBC Global Asset Management on the markets, according to the information available to date. They do not constitute any kind of commitment from HSBC Global Asset Management (France).
Consequently, HSBC Global Asset Management (France) will not be held responsible for any investment or disinvestment decision taken on the basis of the commentary and/or analysis in this document. All data
come from HSBC Global Asset Management unless otherwise specified. Any third party information has been obtained from sources we believe to be reliable, but which we have not independently verified. Any
forecast, projection or target where provided is indicative only and is not guaranteed in any way. HSBC Global Asset Management (France) accepts no liability for any failure to meet such forecast, projection or target.
The fund presented in this document may not be registered and/or authorised for sale in your country. The performance figures displayed in the document relate to the past and past performance should not be seen
as an indication of future returns. It is important to remember that the value of investments and any income from them can go down as well as up and is not guaranteed. Please note that the fund is authorised to
invest a in structured products and derivatives, which may be less liquid than standard bond issues. The fund is exposed to Over the Counter (OTC) markets for all or part of its total assets. The fund will therefore be
subject to the risk that its direct counterparty will not perform its obligations under the OTC transactions and that the Sub-Fund will sustain losses. Investment in Financial Derivative Instruments (FDI) may result in
losses in excess of the amount invested. This is because a small movement in the price of the underlying financial instrument may result in a substantial movement in the price of the FDI. Please note that the fund is
invested in investment grade, below investment grade and non rated issues. Non rated issues represent a higher risk of default compared to Investment Grade issues. Fluctuations in the rate of exchange of
currencies may have a significant impact on fund performance.
HSBC GIF RMB Fixed Income fund is a sub-fund of HSBC Global Investment Funds, a Luxemburg domiciled SICAV. Shares of the Company may not be offered or sold for sale or sold to any U.S. Person within the
meaning of the Articles of Incorporation, i.e. a citizen or resident of the United States of America (the "United States"), a partnership organised or existing under the laws of any state, territory or possession of the
United States, or a corporation organised or existing under the laws of the United States or of any state, territory or possession thereof, or any estate or trust, other than an estate or trust the income of which from
sources outside the United States is not includible in gross income for purposes of computing United States income tax payable by it.
All subscriptions in any fund presented in this document are accepted only on the basis of the current prospectus, available on request from HSBC Global Asset Management (France), the centralisation agent, the
financial department or the usual representative. Before subscription, investors should refer to the Key Investor Information Document (KIID) of the fund as well as its complete prospectus. For more detailed
information on the risks associated with this fund, investors should refer to the prospectus of the fund.
Important information for Luxembourg investors: HSBC entities in Luxembourg are regulated and authorised by the Commission de Surveillance du Secteur Financier (CSSF).
Important information for Swiss investors: This document may be distributed in Switzerland only to qualified investors according to Art. 10 para 3, 3bis and 3ter of the Federal Collective Investment Schemes Act
(CISA). The presented fund is authorised for public distribution in Switzerland in the meaning of Art. 120 of the Federal Collective Investment Schemes Act. (Potential) investors are kindly asked to consult the latest
issued Key Investor Information Document (KIID), prospectus, articles of incorporation and the (semi-)annual report of the fund which may be obtained free of charge at the head office of the representative: HSBC
Global Asset Management (Switzerland) Ltd., Bederstrasse 49, P.O. Box, CH-8002 Zurich. Paying agent: HSBC Private Bank (Suisse) S.A., Quai des Bergues 9-17, P. O. Box 2888, CH-1211 Geneva 1. Investors
and potential investors should read and note the risk warnings in the prospectus and relevant KIID. Before subscription, investors should refer to the prospectus for general risk factors and to the KIID for specific risk
factors associated with this fund. Issue and redemption expenses are not taken into consideration in the calculation of performance data. The fund presented in this document is a sub-fund of HSBC Global Investment
Funds, an investment company constituted as a société à capital variable domiciled in Luxemburg.
HSBC Global Asset Management is the brand name for the asset management business of HSBC Group. The above document has been approved for distribution/issue by the following entity:
HSBC Global Asset Management (France) - 421 345 489 RCS Nanterre. Portfolio management company authorised by the French regulatory authority AMF (no. GP99026) with capital of 8.050.320 euros.
Postal address: 75419 Paris cedex 08, France.Offices: Immeuble Coeur Défense, 110, esplanade du Général Charles de Gaulle, 92400 Courbevoie - La Défense 4 . (Website: www.assetmanagement.hsbc.com/fr).
HSBC Global Asset Management (Switzerland) Limited
Bederstrasse 49, P.O. Box, CH-8027 Zurich, Switzerland (Website: www.assetmanagement.hsbc.com/ch)
Copyright © 2016. HSBC Global Asset Management (France). All rights reserved.
Non contractual document, updated in February 2016 / AMFR_Ext_076_2016