16 February 2019

Local govts may shed debt via share sales, Bloomberg says

Local governments may sell some of their holdings of listed shares, estimated by UBS A.G. to have reached at least 5 trillion yuan (US$820 billion), to help repay their growing debt obligations, Bloomberg News reported on Thursday, citing economists. Partial divestment of local governments’ stakes in state-owned enterprises is one option to address the debt issue, Yao Wei, China economist at Societe Generale S.A. in Hong Kong, was quoted as saying. Local governments have already made such sales over the past two years and repayment pressures mean that more are likely to be undertaken, said Chen Li, a Shanghai-based analyst at UBS. Local authorities are under increasing pressure over their debts as income from land sales falls and a forthcoming national audit, the broadest in two years, puts a spotlight on regional borrowing, the report said.

– Contact HKEJ [email protected]


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