Media365
Hong Kong’s offshore yuan bond market is set for another strong year – as the yuan climbed to its strongest level in nearly three years – prompting bankers to forecast more deals in 2026.
The city’s dim sum bond market, yuan-denominated notes issued outside mainland China, had evolved from a niche funding channel into a more mainstream financing option, as technology firms and global companies accessed a deeper pool of renminbi liquidity amid a firmer currency, bankers said.
They added that the stronger yuan could extend last year’s issuance momentum, which was already the highest in years.
Momentum is expected to build on last year’s rebound, when issuance surged to its highest level in years. Strategists at UBS Global Wealth Management said a stronger yuan would be a key catalyst for the market in 2026.
The People’s Bank of China on Wednesday set the yuan’s midpoint rate – the daily fixing – at 6.9438 per US dollar, its strongest level in nearly three years, signalling tolerance for further appreciation.
Currency strength has already boosted returns. The offshore yuan bond market delivered a 9.2 per cent total return in US dollar terms last year, and further gains in the renminbi “should attract robust investor demand” in 2026 as liquidity improved and the investment universe broadened, strategists including Yifan Hu at UBS said in a recent report.
