skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

About Tim

China

+25 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: Politburo Re-affirmed Bias in Favour of Less Dovish Policy

    China Insight

    Xinhua News Agency reported the Politburo held a meeting on the economy on 30 July (Thursday). The CCP also held a meeting with non-CCP political parties and non-political representatives. President Xi chaired both meetings. Compared to the meeting held on 17 April, we note some changes in wording were made to the remarks on monetary and fiscal policies in the 30 July meeting. 30 July meeting (as per Xinhua News Agency): - "While requiring full implementation of macro policies, the meeting called for pursuing a more proactive and effective fiscal policy that delivers solid outcomes, and a more flexible and appropriate monetary policy that targets sound results, according to the meeting". 17 April Meeting (as per Xinhua News Agency): - "Monetary policies should be more flexible and balanced and instruments such as reserve requirement ratio cuts, interest rate reductions and reloans should be fully leveraged to ensure reasonable and sufficient liquidity and a lower interest rate in the loan market, the meeting said, stressing the need to channel capital into the real economy, especially medium-sized, small and micro enterprises".

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Xi Has Strong Preference For Monetary Policy Normalisation

    China Insight

    In a key speech delivered at a symposium with corporate leaders in Beijing on Tuesday (21 July). President Xi (as per China Daily) urged better implementation of aid packages for businesses, with steps to enforce a more proactive fiscal policy and more prudent and flexible monetary policy to ensure macro policies are more targeted and effective, adding that China will continue with measures to cut taxes, fees, rents and interest rates and ensure its various aid measures can be channeled directly to the grassroots and benefit market players. Before that, President Xi at a meeting on 22 Feb (5 months ago) pledged to exercise more flexibility in monetary easing. The word "prudent" re-appeared in Xi's speech on Tuesday, echoing PBOC's bias in favour of a normalisation of the monetary policy.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Strong Q2 GDP growth signals no more monetary easing

    China Insight

    China's GDP growth jumped to +3.2% y/y in Q2, from -6.8% y/y in Q1. The print was well above market expectations. Before the data was released, PBOC held a press conference on 10 July. At the conference, PBOC officials defined appropriate monetary policy as: 1. quantity of credit supply should not be too large; 2. interest rate should not be too low.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: A look back at 2015 for clues on A-shares' next move

    China Insight

    After trading lackluster in a 500-point range for 12 months, the Shanghai Composite Index (SHCOMP) finally made an upside breakthrough at the beginning of this month on the back of high trading volumes. Suddenly, the market was flooded with optimism. Interbank repo rates have been creeping upwards over the past few days on the back of surging demand for borrowing (financing) associated with IPO subscriptions. Meanwhile, bond yields have been heading upwards as investors switch out of bonds into equities. The whole picture reminds us of the equity boom during November 2014 to June 2015 and the bust afterwards.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: IRS Curve Steepener is Favoured After Latest Rate Cut

    China Insight

    PBOC announced on the night of 30 June that it will cut the re-lending and re-discount rates by 25bp, effective from 1 July, aimed at reducing funding costs for smaller firms and rural sectors. This narrow-based monetary easing echoed CBRC chairman Guo Shuqing's and PBOC governor Yi Gang's views in favour of a timely withdrawal of the counter-pandemic stimulus. In fact, our observation is PBOC has been very cautious about pumping liquidity into the system via OMO since May.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Implications of a Sustained Rise in Repo Rates

    China Insight

    China onshore interbank CNY repo rates (chart 1 and 2) have been creeping upward since CBRC chairman Guo Shuqing at the beginning of the month openly stressed the importance of financial risk control.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Policymakers Give Hawkish Signals

    China Insight

    The 12th Lujiazui Forum, a gathering of senior government officials in economic and financial areas, was held on 18 June in Shanghai. At the forum, the remarks by CBIRC Chairman Guo Shuqing and PBOC Governor Yi Gang drew a lot of attention. - CBIRC Chairman Guo Shuqing: "China will neither adopt flood-like stimulus nor negative rates". He also urged major global economies to consider how to exit from massive easing. - PBOC Governor Yi Gang: "we should consider the timely withdrawal of policy tools (the counter-pandemic) financial support in advance". Interestingly, Guo's and Yi's remarks came after Premier Li Keqiang at a State Council meeting on 17 June emphasized the need for further cuts in the reserve requirement ratio and relending facilities to bring borrowing costs downward and support the real economy as well as small/micro enterprises (chart 1) but did not mention the possibility of interest rate cuts.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Deleveraging Again?

    China Insight

    After bonds were sold off continuously for almost four weeks, CBRC chairman Guo Shuqing on 3 June surprisingly talked about the importance of financial risks control in a conference. Shortly after that, MOF on 8 June expressed its concerns over financial risk management in a statement after holding a conference with local government finance bureau heads. The statement highlighted the need to strengthen scrutiny over officials who borrowed local debt in a way inconsistent with laws and regulations and warned local officials not to ignore debt risks. The statement did not provide specific numbers, but the tone was strong enough to make many people recall the policy theme of financial deleveraging that the President pushed for during 2017-2018. With the economy still struggling to recover from the recession caused by COVID-19, we are quite surprised by the central government being in such a hurry to stress financial risks control. In our view, besides the upcoming issuance of a large amount of central government special bonds, there should be two things at least making the policymakers worried about a deterioration of the leverage outlook of the whole system. Chart 1 shows that the leverage rate of the deposit taking institutions and financial institutions is back at around 11% after reaching as low as 10% in the summer last year. However, bear in mind, it was only at around 12% when President Xi first talked about the importance of financial risks control in March 2017 and then pushed for financial deleveraging over the following 18 months. With many enterprises being in liquidity/financial stress post the COVID-19, we think policymakers are aware of the risk of a strong bounce in the leverage rate in foreseeable future.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Bonds Sold Off After PBOC Opted For Unconventional QE

    China Insight

    On 1 June, PBOC announced several new measures to support small and micro-sized enterprises (SMEs). The most important one is an additional re-lending facility of CNY400billion yuan to support SME credit loans. The PBOC plans to use this re-lending facility at zero interest rate to purchase 40% of new SME loans (with a maturity of six months or longer) issued by qualified regional banks between March 1 and December 31 this year. Simply speaking, PBOC provides, at zero interest rate, 40% of the funding for each loan issued by commercial banks to SMEs, while the banks will bear the default risk of the underlying loans...

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Messages From NPC Are Less Dovish Than Expected

    China Insight

    The NPC ended on Thursday (28 May). In the post-NPC press conference, Premier Li Keqiang gave a couple of remarks: - China will not hesitate to loosen policy more if needed. The focus of the policy loosening is not on infrastructure but on consumption. It's worth noting that Premier Li, unlike in the past, this time didn't say he would maintain ample liquidity in the financial system. - Premier Li Keqiang did not agree with the market's statement that the planned policy package is not strong enough. He said the magnitude of the policy package is reasonable, indicating low possibility of aggressive stimulus in the near term. Overall, Premier Li's remarks reflect central government's intention to avoid being too dovish in the aftermath of COVID-19.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: NPC Announced Smaller-Than-Expected CGSB Issuance

    China Insight 0520

    The NPC meeting officially kicked off in Beijing (22 May). There, Premier Li Keqiang announced: - a CNY1,000bn issuance of central government special bonds (CGSB), versus the market consensus of CNY2,000bn - a CNY3,750bn issuance of local government special bonds, versus last year's CNY2,150bn and a market consensus of CNY3,500-4,000bn - a rise in fiscal deficit-to-GDP ratio target to 3.6%, vs last year's 2.8%.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: After a Strong Sell-Off, Bonds Look Attractive Again

    China Insight 0514

    The bond market got sold off sharply in the first half of May, regardless of the stable liquidity. We attribute the sell-off partly to mounting supply pressure and partly to the market being overly crowded with long positions.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: CNH is Showing Last Bit of Strength

    China Insight

    On 7th May 2020, PBOC and SAFE officially issued the "Measures on Capital Management of Foreign Institutional Investors Investing in Securities and Futures in China". The key features of this policy are summarized below: The quota mechanism for QFII/RQFII is abolished; Foreign institutional investors can remit in foreign currency (FCY) or Renminbi (RMB) or both depending on their investment needs, and open the corresponding FCY and RMB accounts. Restrictions on custodian appointment no longer exist. That means the foreign institutional investor can appoint multiple custodians based on their business needs. Foreign institutional investors can choose to provide the tax commitment letter for each profit repatriation, or provide a onetime tax commitment letter stating covered period and the cumulative profit amount for repatriation. The new policy will come into effect on 6 June 2020. As per the state-owned media, the removal of the quota restrictions on QFII, RQFII is aimed at boosting financial opening. But we believe it, to a certain extent, is more or less driven by policymakers' concerns over FX reserves adequacy. Chart 1 shows that China's FX reserves have been failing to increase further since reaching USD3119bn in summer last year. With monetary easing underway, more FX reserves are needed, otherwise it will be increasingly difficult for PBOC to stabilize RMB FX. It's worth noting that the USD30.9bn increase in FX reserves in April was still far from big enough to offset the USD46.1bn decline in March.  

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Scenario of Local Govt Bond Supply Before NPC

    China Insight

    Beijing announced that the National People's Congress (NPC) will commence its annual meeting on 22 May, after being postponed from 5 March due to the COVID-19 outbreak. Nobody is sure if the year 2020 GDP growth target will be announced there given the deep downturn in Q1. If a target is given, we guess it is going to be at an achievable level, say 3% or slightly lower. No matter whether a growth target will be given, we will definitely see a bigger fiscal budget deficit number and higher CPI target in the annual Government Work Report (GWR) announced at the NPC. We expect a significant increase in the headline fiscal budget deficit to 4.5% or even 5.0% of GDP in 2020, from the budgeted 2.8% in 2019, given a declining fiscal revenue and an expanding expenditure. Meanwhile, a quota of special local government bond issuance at CNY3.5tn (not surprising if’s as high as CNY4tn) will be given. Moreover, the CPI inflation target will likely be raised to 3.5%. In regard to local government bond issuance, we expect to see a huge supply of local government bonds in May after an issuance of CNY1000bn local government special bonds (i.e. the third batch of local government special bonds for 2020) was announced. In April this year, we saw a seasonal decline in local government bond supply, which will be followed by an increase in May and June (chart 1). Repeating its pattern in previous years, supply will remain abundant in Q3, we believe.  

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Short-Term CGBs Look Cheap Ahead of 5/1 Holiday

    China Insight

    The 5/1 holiday is coming which is the first long holiday after the COVID-19 came under control in mainland China. Historically, liquidity tightening would be emerging during the third week of April on the back of holiday-related cash demand from both individuals and business entities. However, this kind of liquidity tightening is not happening this year (chart 1). We think consensus in the market is that Beijing definitely will ensure the banking system is equipped with enough liquidity during the holiday. We won't be surprised if PBOC resumes liquidity injection via OMO right before the holiday starts on 1 May.  

    Topic Industry News