Key Takeaways:
- 💼 Standard Chartered has suspended new subscriptions by its clients in China into offshore products via a quota-based channel since last week
- 💰 The suspension is due to "commercial reasons" as explained by the London-headquartered bank
- 🔒 The move comes amid Beijing’s efforts to stem capital outflows as weaker yuan and a slowing economy have led savers to move assets offshore
- 🌏 The Qualified Domestic Institutional Investor (QDII) program allows both domestic and foreign institutions to help Chinese wealth and corporate clients invest in offshore funds, bonds, and structured products
- 💱 China’s yuan has faced depreciation pressure against the dollar, losing about 1.4% so far this year
- 🏦 Standard Chartered has been awarded a total QDII quota of $2.8 billion since 2006, ranking as the third-largest among foreign banks
- 📊 The bank has not publicly disclosed how much of the quotas have been utilized.
- 🛑 The suspension is due to "commercial reasons" without further details provided.
- 📉 The yuan has faced depreciation pressure in 2024 due to a strengthening dollar.
- 📈 Hornblower’s core businesses are delivering excellent results and experiencing growing demand
- ⛴️ American Queen Voyages (AQV) will be sold or wound down due to underperformance
- 💼 Hornblower will be acquired by investment firm Strategic Value Partners LLC (SVP)
- 🌍 SVP focuses on special situations, private equity, and financing opportunities
- 💰 Hornblower will receive $121 million in new-money financing from SVP-managed funds and Crestview
Standard Chartered Suspends QDII Quotas for China Clients
Standard Chartered, a leading bank based in London, has recently made the decision to suspend new subscriptions by its clients in China into offshore products via a quota-based channel. This suspension, which took effect last week, is reportedly due to "commercial reasons," although no further details have been provided by the bank.
The move by Standard Chartered comes at a time when Beijing is intensifying its efforts to curb capital outflows, as a weaker yuan and a slowing economy have led many savers to seek to move their assets offshore. The bank’s actions have affected investments made under the Qualified Domestic Institutional Investor (QDII) program, which allows both domestic and foreign institutions to assist Chinese wealth and corporate clients in investing in offshore funds, bonds, and structured products.
Since 2006, Standard Chartered has been awarded a total QDII quota of $2.8 billion, ranking as the third-largest among foreign banks. However, the bank has not disclosed how much of these quotas have been utilized.
On a separate note, Hornblower, a prominent company in the tourism and hospitality industry, is set to be acquired by investment firm Strategic Value Partners LLC (SVP). The acquisition will see Hornblower receive $121 million in new-money financing from SVP-managed funds and Crestview. Additionally, Hornblower’s core businesses are performing well and experiencing increasing demand, despite the planned sale or winding down of American Queen Voyages (AQV) due to underperformance.