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About Tim

China

+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

    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: 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 Riki Zhang 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 Riki Zhang 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: The US May Consider Limiting Investments in China

    15 Oct 2019

    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: RRR Cut Reinforces Our Bullish View on CGBs

    17 Sep 2019

    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

    10 Sep 2019

    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

    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: What Tactics Are Good in Dealing With Ongoing RMB Depreciation

    20 Aug 2019

    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

    EM Asia Insight: Carry trades to turn popular again, long INR/CNH at dips favoured

    30 Jul 2019

    TThe 2-day FOMC meeting will kick off soon after this article is published and the firm market consensus as of now is that the Fed will cut Fed funds rate by at least 25bp at the meeting. A kick-off of the Fed easing cycle would (1) keep the USD and core rates pinned down, which should pave the way for Asian FX appreciation against the USD (chart 1); and (2) should be conducive for EM carry trades again (Chart 2).

    Topic industry-news

  • IGM Credit, IGM FX and Rates

    China Insight: Beijing Will Likely Let CNY Depreciate Without Fear

    28 May 2019

    EM investors are again caught in a trade war waiting game. The overall effect of the US-China failure to reach a trade deal on EM Asia FX is negative. Needless to say, CNY is in the eye of the storm, which has lost 1.3% since the US extra tariffs on the USD200bn of Chinese goods that came into effect on 10 May.

    Topic industry-news

  • IGM Credit, IGM FX and Rates

    China Insight: Watch PBOC Policy U-turn as Trade War Intensifies

    21 May 2019

    China has been in the spotlight year to date, largely in regard to the pick-up in credit stimulus and growth data in recent months. Given the improving growth momentum in Q1 and rising inflation pressure, the signals given by the People’s Bank of China (PBOC) in April reflected policymakers' growing bias for a less accommodative monetary policy stance in H2. However, the drastic turnaround of trade negotiations in the week ending 12 May was totally out of expectations. This, we think, will inevitably hurt investor sentiment and business confidence, as the markets had been expecting a trade deal until the 11th round of the US-China trade talks ended up with no agreement but an increase in tariffs.

    Topic Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: USD/CNH to Keep Rallying on Failure to Reach Trade Deal

    14 May 2019

    China Insight 0514

    US President Trump tweeted on 5 May that tariffs on the USD200bn in Chinese imports will rise from 10% to 25% on 10 May and that an additional USD325bn of goods will get a 25% tariff shortly. Trump attributed his decision to the slower-than-expected progress of the US-China trade negotiations and China's attempt to renegotiate. US Trade Representative Lighthizer and US Treasury Secretary Mnuchin had implicated on 6 May that Chinese officials tried to re-open negotiation on areas that had already been negotiated. In the eyes of US negotiators, Chinese officials' moves represented an erosion of commitments by China and a big change in direction for the negotiation.

    Topic industry-news