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About Tim


+24 year(s) experience

Tim Cheung, Head of China products, IGM, headshot
Tim Cheung heads up IGM’s China products, keeping screens updated with the latest trading strategies, often adopted by hedge funds and institutional investors.

Since 2000, he has been working with IGM to develop a range of Chinese language products for mainland China and Hong Kong. In his current role, he’s responsible for all the China content including IGM's Chinese language services. He provides key insight on the CNH/CNY markets as well as flow commentary on the emerging Asian FX market and Asian credit.

Tim joined us in Hong Kong in 1995 from MMS International. Before that he worked in the banking sector.

Tim has a bachelor’s degree in economics from Wolverhampton University.

Analyst Articles

Articles by Tim

  • IGM Credit, IGM FX and Rates

    China Insight: Bond Inflows Slow Down But RMB FX Little Impacted

    By Tim Cheung 03 Dec 2019

    China Insight 1203

    Chinese onshore bonds saw a reduction of net inflows to USD2bn in October, down 82% from a month ago (chart 1). Foreign investors' net purchase of CGBs slowed to USD2.2bn, down 70% from September. Meanwhile, policy bank notes and NCDs saw small outflows of -USD0.5bn and -USD0.8bn respectively, vs an inflow of USD2bn to each of them in September. We attributed the slowdown in bond inflows largely to bear-steepening of the CGB yield curve as a result of the growing reluctance of PBOC to ease monetary policy in an environment of rising CPI inflation.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: PBOC Constrained by Challenging CPI Inflation

    By Tim Cheung 26 Nov 2019

    China Insight 1126

    In the Q3 monetary policy report released in the middle of this month, PBOC suggested that the less dovish stance in monetary policy that we have seen since August may continue in the coming months, given the challenging CPI inflation outlook. To avoid public misinterpretation of being "less dovish" as a signal of a shift towards tightening, PBOC on 18 November resumed the 7-day reverse repo to inject liquidity and lowered the reverse repo rate by 5bp to 2.5%, the first reverse repo rate cut in this easing cycle (chart 1). The cut aimed to lower the wholesale funding cost and then to translate into a lower corporate borrowing cost. The magnitude of the cut was small, suggesting PBOC is constrained by the accelerating CPI inflation which reached as high as 3.8% y/y in October.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: More Small Banks in Trouble as Re-leveraging Underway

    By Tim Cheung 19 Nov 2019

    China Insight 1118

    The health of China's smaller banks has come under pressure as Yichuan Rural Commercial Bank and Yingkou Coastal bank are said to have suffered bank runs in recent weeks amid fears over poor management and liquidity issues. Earlier this year, a rare government takeover of Baoshang Bank and a state rescue of Jinzhou Bank and Hengfeng Bank raised concerns about the underlying health of hundreds of small banks in China. Admittedly, China has entered another round of re-leveraging, albeit a softer one this time. With the fundamental issue of macro leverage unsolved, we expect China's debt-to-GDP ratio, currently in the 290-300% area, to reach 320% by 2025 (chart 1).  

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Long-Awaited MLF Rate Cut Finally Happened

    By Tim Cheung 12 Nov 2019

    China Insight 1112 1

    PBOC cut the 1-year mid-term lending facility (MLF) rate by 5bp to 3.25% on 5 November (chart 1) while rolling over the matured MLF refinancing. The cut will likely drive down the loan prime rate (LPR) further, which was left unchanged at 4.20% and will be repriced on 20 November (chart 2). As the first cut in the MLF rate in this easing cycle, it suggests PBOC is faced with growing risk of further economic slowdown. However, the magnitude of the cut is small, reflecting the degree of monetary easing is constrained by growing CPI inflation.  

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Special Bond Issuance Will be Subdued in Q4

    By Tim Cheung 05 Nov 2019

    China Insight 1105

    Given the lower-than-budgeted fiscal revenue growth so far in 2019 (chart 1), the central government may find it difficult to fulfil its fiscal transfer budgets. As such, local governments could rely more on borrowing to support infrastructure investment. As the total local government bond issuance quota of CNY3.1tn has been fulfilled this year, the total size of extra issuance could be up to CNY2.5tn (including CNY1.3tn in general and CNY1.2tn in special) if necessary. If the government decides to fully utilize the extra special bond issuance quota within the debt ceiling, it could bring CNY2.1tn funds to the government to support infrastructure investment. However, chart 2 shows that special bond issuance has been subdued since it reached its year-high in June. Given the restricted commencement of winter construction, special bond issuance will likely remain subdued in Q4.  

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: IRS Curve Appears Too Steep to Reflect Slowdown Risk

    By Tim Cheung 29 Oct 2019

    China Insight 1029

    Real GDP growth eased to 6.0% yoy in 3Q from 6.2% in 2Q, the lower bound of the policy target range this year (chart 1).

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: The US May Consider Limiting Investments in China

    By Tim Cheung 15 Oct 2019

    China Insight 1015

    A couple of negative headlines came out on 8 October before the 13th round of US-China trade talks starts. The US blacklisted 28 Chinese entities and government agencies over human rights violations and repression in Xinjiang; White House has started looking to consider limits on the US pension investments in Chinese equities;

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: We Are Just in Short-Lived Peace

    By Tim Cheung 01 Oct 2019

    China Insight 1001

    Ahead of high-level trade talks scheduled for the second week of October in Washington, there is the growing expectation that an interim or mini deal between the US and China will be reached there.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: CGB Inclusion to JPM Indices Won’t Have Much Impact on RMB FX

    By Tim Cheung 24 Sep 2019

    China Insight 0924

    JP Morgan in early-September announced that China Government Bonds (CGBs) will be included in its series of GBI-EM bond indices, starting 28 February 2020. The inclusion will take place over a 10-month period and be completed at the end of November 2020. This is another major bond index's inclusion of China, following Bloomberg Barclays'.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: RRR Cut Reinforces Our Bullish View on CGBs

    By Tim Cheung 17 Sep 2019

    China Insight 0917

    PBOC on 6 September announced a cut in the reserve requirement ratio (RRR) for all financial institutions by 50bps and a cut for some city commercial banks by an additional 100bps, effective on 16 September. As per PBOC, the RRR cut will release liquidity to the amount of CNY900bn (chart 1). The PBOC stressed that the 900 billion yuan of liquidity should enhance the source of funds for financial institutions to support financing needs of the real economy.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    Hong Kong Insight: Concerns Over Capital Flight Are Growing

    By Tim Cheung 10 Sep 2019

    China Insight 0910

    The HKMA, on 26 August, announced it had completed a review of its framework for the provision of liquidity to Authorised Institutions (AIs). A new Resolution Facility was introduced to provide for the scenario in which resolution powers under the Financial Institutions (Resolution) Ordinance (FIRO) are exercised by the Monetary Authority as the Resolution Authority. The HKMA has also taken the opportunity to communicate and restate the framework for provision of liquidity, incorporating certain refinements to the prior arrangements where appropriate, so as to foster a better understanding on the part of the market of the different facilities through which the HKMA makes temporary HKD liquidity (i.e. not in the nature of capital support) available to AIs to maintain integrity and stability of the monetary and financial systems in Hong Kong.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: RMB Depreciation Will Intensify if IEEPA Threat Materialises

    By Tim Cheung 03 Sep 2019

    China Insight 0903

    The latest escalation in US-China trade tensions has already put additional depreciation pressure on RMB FX. It is increasingly likely that our target 7.5000 will be reached as soon as autumn. If China were to offset the announced additional tariffs by the US via RMB depreciation only, we suspect USD/CNH would need to reach as high as 7.65. So far, we have merely based our analysis on what degree of RMB depreciation is needed in order to compensate for the potential loss of trade competitiveness as a result of tariffs.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: New LPR Mechanism is Bullish For Government Bonds

    By Tim Cheung 23 Aug 2019

    China Insight 0823

    PBOC finally officially announced on 17th of August interest rate reform using the LPR (Loan Prime Rate) as a benchmark for new loans. As per the announcement, eighteen banks are selected as LPR quoting members and each of them are required to submit one LPR quote for a 1-year period and one for a 5-year period to the National Interbank Funding Centre (NIFC) on the 20th of each month.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: What Tactics Are Good in Dealing With Ongoing RMB Depreciation

    By Tim Cheung 20 Aug 2019

    China Insight 0820

    On 13th August New York time, the US Trade Representative's Office announced delaying till 15th December the 10% tariffs on about half of the USD300bn of Chinese goods, that were originally scheduled to come into effect 1 September. Though the tariff delay should increase Beijing's interest in sending a delegation to Washington for another round of trade talks in September, we do not think a trade deal will be reached anytime soon. We reiterate our view that China is adopting "better-late-than-early" strategy and will continue to let the trade talks drag on till at least year 2020.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: RMB Depreciation is Needed as Long as Trade Talks Drag on

    By Tim Cheung 13 Aug 2019

    China Insight 0813

    Asian markets were shocked by Trump's announcement of the imposition of 10% tariff on the remaining USD300bn of Chinese starting, effective 1st September. The announcement came totally unexpectedly as nobody would think in advance that the face-to-face meeting between the US and Chinese trade negotiators would end up with further widening, instead of narrowing, of the gap between two countries.

    Topic Industry News