Hungarian economy minister opens London Stock Exchange to mark listing of yuan bond
Budapest, May 12 (MTI) – Economy Minister Mihály Varga ceremoniously opened the market on the London Stock Exchange on Thursday, marking the listing of a RMB 1 billion yuan bond Hungary recently issued.
The issue of the bond has “symbolic significance”, as it is not very big, but sends the important message that China must be reckoned with in the long term, too, Varga told MTI after the ceremony.
Hungary issued the three-year dim sum bond in mid-April.
Varga said that, unlike earlier, Hungarian bonds are attracting investors who plan to hold on to the securities for the long term. Especially favourable is the fact that among the institutional investors are pension funds, he added.
Varga said investors in continental Europe and the UK had subscribed the yuan bond.
Asked whether Hungary planned to issue a yuan bond targeted at investors on the Chinese market, Varga said that the Bank of China, its partner in the dim sum issue, had recommended a possible panda bond issue. The general opinion is that panda bonds promise lower yields and would be a cheaper market for Hungary to tap, he added.
“We’ll think about it. The Bank of China is a reliable partner on the Chinese market: whether or not such an issue would take place this year depends on what they say and their opinion,” he said.
Asked whether the government expects Hungary to be bumped up to investment grade, Varga said Hungary’s real ratings agency is the market, and requests for further issues are coming from big trading houses one after the other. In this environment, the assessments of ratings agencies are secondary, but “we’re rooting for them to follow the market opinion”, he added.
London Stock Exchange group CEO Nikhil Rathi said after the ceremony on Thursday that the yuan bond was the biggest one listed on the bourse this year.