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A dim sum bond is a bond denominated in renminbi but issued outside China. The first dim sum bonds were issued in Hong Kong, which is where they received their name. Dim sum is a form of Chinese food served in small bite-sized portions.
In February 2013 it was reported that appetite had returned for dim sum bonds. The market had underperformed in 2012 because the renminbi dropped 1.6 per cent against the US dollar between March and July shattering assumptions that it would inexorably rise due to being undervalued. The fall in the renminbi led to subdued interest in the dim sum bond market as many investors had been using the bonds as a currency play.
By February 2013, the renminbi had risen to a fresh high against the US dollar and although expectations for further appreciation in 2013 looked muted there was renewed enthusiasm for investment in China. Renminbi bond prices rose and yields had fallen to 4.1 per cent from 4.6 per cent in December.