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Update Alerts

NPL write-offs: certain pain, possible gain

Thanks to tighter liquidity conditions in China's financial system – and quiet direction from the regulators – China's banks have substantially increased write-offs of non-performing loans (NPLs) since the beginning of 3Q13. Particular banks may well have to seek new capital in 2014. However, ongoing disposals of NPLs, and the further development of markets for asset-backed securities (ABS) may well provide investment opportunities in the coming year.

13 December 2013

China Cinda: first mover on NPLs

The hugely successful initial public offering (IPO) of China Cinda Asset Management Corporation (1359:HKG) highlights two major trends that are likely to continue into 1H14. One is the revival in IPO activity on the Hong Kong Exchange, the other is the sharp rise in disposal of non-performing loans (NPLs) by banks in mainland China. China Cinda now has a treasure chest of $2.5bn in new funds, 60% of which will be used to bid for NPLs.

13 December 2013

Onwards and upwards – renminbi and the trade surplus

Rising from $31.1bn in October to $33.8bn in November, China’s trade surplus is at the highest level since January 2009. This is in spite of the recent strength in renminbi, which appears likely to continue in the short term. Indeed, a factor that has been a major contributor to the rise in the surplus has been the slow growth of imports.

09 December 2013

Dim sum bonds: more servings on the way

The strength of renminbi in the recent past is clearly expected to continue. Offshore renminbi (CNH) deposits in Hong Kong have been surging. This is at a time when the Hong Kong Monetary Authority (HKMA) has raised concerns over rapid growth in lending by the banks. It is highly likely that at least some of the increased deposits will find their way to CNH-denominated dim sum bonds.

02 December 2013

Banks: seeking capital in Hong Kong

Chinese banks are facing a number of challenges as the authorities in Beijing seek to crack down on the various excesses of the last few years. This is clearly having an impact on the banks’ performance metrics: as a result, they are in need of capital. In turn, the Hong Kong IPO market has received a boost on the back of this.

18 November 2013
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CHINA CONFIDENTIAL

An integrated research service from the Financial Times that provides premium, exclusive analysis and predictions on China investment themes.

Using a dedicated FT team of specialists in China and the UK, it taps Chinese sources from the grassroots to the political elite to forecast key trends and issues. It conducts proprietary research to supply its own insights into industry trends and consumer sentiment. By filtering the work of the best Chinese analysts and academics, it keeps you current on key debates as they unfold inside mainland China. Its broad aim is to help the professional investor navigate through the Chinese investment landscape.

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