China’s GF Financial Markets joins LSE as RMB gains traction
Chinese brokers GFFM has begun trading on the London Stock Exchange
Chinese broker GF Financial Markets has joined the London Stock Exchange, hoping to capitalise on international opportunities – including the dramatic rise of London as a centre of renminbi trading.
The official currency of China, the renminbi is the eighth-most traded currency in the world according to Swift, with particular volumes recorded in Hong Kong, Singapore and London. Closer to home, London has been keen to develop a reputation as the offshore renminbi centre for the whole of Europe.
GF Financial markets is part of the GF Securities group, based in Guangzhou, China. The bank is the first equity and derivatives-focused Chinese member of the LSE. Its addition the membership follows on from the listing of two Chinese ETFs in London in January, which included the CSOP Source FTSE China A50 UCITS ETF, the first ETF giving European retail and institutional investors access to China A shares, which have previously been severely restricted to outsiders.
Since July 2010, is has been theoretically possible for corporates to settle in RMB anywhere in the world, but liquidity has been an issue. However, in November 2013, Industrial and Commercial Bank of China launched a $329 million renminbi-denominated bond in London, marking the first time a Chinese bank had done so and a significant boost for London’s ambitions in the currency.
“GFFM is very pleased to become a London Stock Exchange member, following the acquisition of NCM last year and our admittance as the first Chinese category one ring member in LME,” said Edward Shi, managing director at GFFM. “London is a leading international financial centre in the world, famous for its connectivity, diversity and speciality. We will make the best use of this platform to achieve GF group’s international dream and dedicate ourselves to serve Chinese and international investors. ”
UK chancellor George Osborne visited China last year, resulting in a deal whereby UK investors would be the first outside China to be allowed to apply for a licence to invest in China in renminbi. The agreement followed a long period of negotiation between the City of London, the UK government, and the Chinese authorities.
