China’s emergence as a superpower ensures that its fiat currency will continue to play an increasingly larger role in the global economy—a reality that investment banks have not overlooked. But to reap tomorrow’s benefits, seeds must be planted today.
BNP Paribas took the initiative to establish itself as a first mover in the space, significantly expanding its yuan-linked offering to capture the tailwinds of renminbi internationalisation. Rather than settling for just the traditional CNHUSD pair, it widened the shelf to include other crosses for options and structured products, including with EUR, AUD, JPY, GBP, SGD and HKD.
In addition to its future ambitions, BNP Paribas also capitalised on a critical client need for yuan exposure via the the promotion of a USDCNH 1-year certificate after years of one-way CNH trading significantly reversed in 2017.
“Over the past few years, there was heavy interest from private banks for long CNH positions but the currency has since depreciated considerably,” says Ken Tan, head of FX investor solutions sales, wealth management & family offices, global markets APAC, BNP Paribas. “We recognised this need and responded by proposing the rescuer certificate to enable clients the potential to convert CNH into USD at a much more attractive rate.”
A solid commitment to being a future leader of yuan-linked structures, a hefty shelf of crosses and the continual pursuit of excellence led Asia’s private banks to select BNP Paribas as the Best Provider of RMB-linked Structured Products in 2017.