Bloomberg’s continuing innovation for China’s currency markets was recently recognized with two industry awards. Bloomberg won the Best FX Data Provider Award at the Shanghai China Forex Investment Summit 2014 and in Hong Kong last week, we took out the 2014 Renminbi (RMB) Business Outstanding Award run by Wen Wei Po and Metro Radio.
Global foreign exchange markets are a key facilitator and driver of global trade. Over the last two decades, one of the biggest stories in global trade has been the emergence of China. So it’s not surprising that investors around the world and many of our clients are looking for foreign exchange (FX) tools that can help them connect to China through offshore markets, with confidence and transparency.
As China becomes a new dynamic in the global financial ecosystem, its infrastructure and requirements around yuan trading is also rapidly developing. Today, only 1% of global trade is settled in CNY (Chinese yuan) while China is involved in 12% of trade globally. It is clear this will change. In fact, it’s expected that within the next five years, trade settlement in CNY will quadruple.
Bloomberg has been a catalyst for this explosive growth in CNY, innovating with new investment tools including news, analytics and data sets for the onshore and offshore markets.
The Chinese yuan now comprises 2.2% of all global foreign exchange turnover and has entered the top 10 most traded currencies for the first time, according to a 2013 Bank for International Settlements Survey. Bloomberg’s CNH or offshore yuan business volumes have surged by multiple times this year alone.
What’s notable about these awards is that they didn’t exist a few years ago. Relative to other financial ecosystems, the pace of change in China’s currency markets is gathering.
Internationalization of the yuan is seeing investors place significant value in transparency and having the right information and tools to spur investment decisions.
Underlying these trends is a broad investor need for greater efficiency and progressive solutions that can drive market development. Bloomberg’s technology is playing a critical role in the shift towards electronic trading. The power of data and analytics has been transformative for the currency market, increasing liquidity and price transparency that in turn bolsters investor confidence and enhances market participation.
Bloomberg’s early partnership with the China Foreign Exchange Trading System (CFETS) meant that we were the first to provide China interbank FX rates globally. Our legacy in fixed income provides investors access to data on over 500 dim sum bonds and a comprehensive set of information and analytics for generating ideas, executing trades and analyzing risk.
The internationalization of the yuan will continue to evolve. And in the coming years, we will likely see strong developments in provision of CNY deposit accounts and the use of CNY for settlement. CNY as an investment currency will underpin ongoing creation of its offshore markets.
China is increasingly moving to the center of global trade and facilitators like Bloomberg are responding, and will continue to set industry standards, for a long time to come.
Contributed by Mark Flatman, Head of Asia Pacific Sales, Bloomberg LP