Date
23 October 2017
Preview Images Ahead Of The National People's Congress

The Big Picture: ASSET SECURITIZATION PUSH

China Development Bank (CDB), the nation’s top policy lender, has successfully completed the issuance of asset-backed securities worth 8 billion yuan (US$1.31 billion), the first batch since the State Council approved in August the expansion of a trial program on credit asset securitization.

The securities were backed by medium-term loans previously offered by CDB to China Railway Corp. for the Kaiyuan railway project, the People’s Bank of China (PBoC) said in a statement Monday. They were issued through a tendering process and were oversubscribed 1.1 times. The coupon rate was set at 5.6 percent.

Proceeds will be used to redevelop shantytowns and support important infrastructure projects, the central bank said.

The expansion of the trial program on credit asset securitization is an important measure to push forward economic structural reform and industry upgrade. The PBoC will encourage qualified Chinese lenders to join the program to raise more funds to support small and micro firms as well as agricultural companies, it said.

Credit asset securitization is a new channel for Chinese banks to generate funding resources to maintain their loan growth amid Premier Li Keqiang’s {李克強} order to limit money supply. Observers believe more banks will issue asset-backed securities soon.

Over the past decade, mainland banks have been granted huge amounts of new liquidity by the central bank to maintain good loan growth. However, the excessive liquidity and easy credit caused overexpansion and overcapacity in some industries, pushed property prices higher and fueled inflationary pressures.

China has been printing too much money in the last decade. The nation’s M2, a broad measure of money supply, rose 14.3 percent to 107.02 trillion yuan at end-October from a year ago, exceeding the official full-year target of a 13 percent gain. 

SME confidence index down

Small Chinese businesses are cautious about the economic prospects amid a manufacturing contraction in recent months, China Daily reported Monday, citing a bank survey. The Standard Chartered Bank China SME Confidence Index hit 52.04 for the second quarter this year, down 4.47 from the previous three months. All five sub-indices fell in varying degrees during the period.

WeChat global active users said to hit 270 mln

WeChat, the messaging service of Tencent Holdings (00007.HK), has more than 270 million active users in more than 200 countries, Caijing.com reported Monday, citing vice president Zhang Ying. Public accounts have grown to more than two million in the past 15 months and are increasing at 8,000 a day, the report said. WeChat was launched three years ago and operates in more than 20 languages.

– Contact HKEJ at [email protected]

JP/AC/RC

 

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