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P2P – continuing to grow amid uncertainty

With the popularity of P2P lending platforms continuing to grow despite a series of scandals, industry participants and investors assess the outlook for the sector.

25 September 2014

New bank deposit rules could squeeze shadow finance

Chinese banking authorities have issued new rules to curb the artificial inflation of deposits at the end of each month or quarter. The new regulations could significantly reduce banks’ exposure to shadow finance, likely squeezing their finances and lending capacity. However, we are unsure how effectively the new regulations will be enforced.

15 September 2014

Weak credit rebound in August

Credit growth rebounded in August from very low levels in July, with the sum of total social financing (TSF) – the widest official measure of financing in the economy – and our estimate of underground lending rising to Rmb1,199.7bn in August, up 150% MoM. However, credit growth remained down 34% YoY. 

12 September 2014

Weakness persists into August

The evidence suggests that much of the weakness seen in July continued throughout August. Though there are some signs of life in the real estate sector, we continue to believe that, without substantial government action, a significant uptick in growth remains unlikely.

11 September 2014

Developer financing risks mount

1H14 financial results for China’s largest developers reveal faster debt accumulation, declining profit margins and rising inventories, suggesting that real estate sector risks are starting to rise.

10 September 2014

Return of the bull market?

Investors and economists are debating whether recent strong growth on mainland stock markets represents the return of a bull market, or simply a long-awaited readjustment.

10 September 2014

Selected financial charts

A selection of key financial data over the past fortnight.

28 August 2014

Further trust slowdown ratchets up the pressure

Trust issuance has continued to slow as the value of maturing trusts are rising dramatically, increasing potential default risks. To date, however, policymakers remain reluctant to countenance infrastructure trust defaults, with defaults most likely to occur within the energy and mining sectors.

28 August 2014

Recovery proves short-lived

Sluggish July data and initial indications from our proprietary surveys in August appear to have borne out our prediction that the apparent uptick in Chinese economic growth seen in June would prove short-lived.

28 August 2014

Bond markets rebound despite rising default risks

Stricter shadow finance regulations, a series of targeted easing measures by the central bank and market participants’ increasing acceptance of bonds as risk-based investment assets have contributed to a sharp rebound in bond issuance in recent months.

31 July 2014
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