China stops buying free-trade zone bondsChina is said to have stopped buying bonds issued in the Shanghai free-trade zone, to rein in risk and is expected to hold off on unveiling aggressive stimulus or big economic reforms at the politburo meeting later this month.
The People's Bank of China in May told lenders that they can only buy notes sold in the China (Shanghai) Pilot Free-Trade Zone if the issuers have genuine operations in the area, in an increased scrutiny of the
US$18 billion (HK$140.4 billion) market mostly used by local government financing vehicles.
There hasn't been a single FTZ bond sold after June 16, it said.
This came as Goldman said its clients did not expect major policy easing measures or structural reform measures to be rolled out during the politburo meeting.
Structural reforms - which could address problems in the property market or the financing challenges of local governments - would not be announced soon, Goldman economists added.
Meanwhile, China Index Academy said further stimuli are needed to support the sluggish property market as many potential buyers are still worried that their income and property prices may drop in the future.
While state-owned developers posted a rise in sales, private players continued to see a slide. China Overseas Land and Investment's (0688) contracted property sales surged by 30 percent to 180.2 billion yuan (HK$194.9 billion) in the first half of this year from a year ago and that of Poly Property (0119) soared 127 percent to 37.4 billion yuan, filings showed. CIFI (0884), in contrast, saw contracted sales sink by 33.6 percent to 41.94 billion yuan.
Source: Bloomberg
https://www.thestandard.com.hk/section- ... zone-bonds
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
by winston » Thu Jun 08, 2023 8:22 am 