FT: Alibaba Plans Hong Kong MMF
The Financial Times wrote, "Alibaba in Talks for HK Version of Yu'E Bao Money Market Fund." The piece says, "Alibaba is looking to start a Hong Kong version of its enormously popular Chinese money market fund, which pays higher rates on renminbi deposits than are available on conventional accounts. Its Alipay financial unit is in talks with the Hong Kong Monetary Authority about securing authorisation to offer a local version of its Yu'E Bao money market fund, which launched in June last year and had already attracted more than Rmb574bn ($94bn) a year later. The move underscores Alibaba's determination to take its template to the world beyond China, now that it has completed its record $25bn initial public offering in New York. If Alibaba receives approval from both Hong Kong and China, the funds would be invested in the mainland in order to achieve higher returns. The group says it believes it could offer 4 per cent returns, compared with the 1 per cent currently available. "We are hoping to introduce it by early next year," said Ming Shu, who is responsible for micro finance and SME finance for Alipay, which is also China's largest online payments provider.... Currently the main channel through which fund companies can invest offshore renminbi in mainland capital markets is the Renminbi Qualified Foreign Institutional Investor programme. Regulators have not so far approved a money market fund under RQFII, which mainly consists of bond funds and equity exchange traded funds." The FT also published a story on "Fed 'Repo' Tests Drive Scramble for Safety," which reads, "Investors are scrambling for safe assets ahead of the end of the financial quarter, with the scrum for securities exacerbated by the Federal Reserve's testing of a key financing tool for an eventual tightening of policy. Yields on short-term Treasury bills, viewed as ultra-safe securities, have dipped below zero as the assets attracted heavy buying in the run-up to the end of the third quarter. Negative yields on the securities mean that money market funds and other big investors are effectively willing to pay the US government for holding their cash over the end of the financial period."
