China Railway’s Debt Reaches New High

The debt of State-run China Railway Corporation reached 300 billion yuan ($44.68 billion) in 2018, far exceeding the planned 240 billion yuan in 2018, an increase of 25 percent.

The report added that national railway investment in 2019 is expected to exceed 800 billion yuan, a record high. According to the NDRC, China plans to start construction of 26 railway projects and another 19 reserve projects this year.

The total amount of railway bonds issued in 2018 was 240 billion yuan, accounting for about 30% of the annual railway investment, according to report. The national railway fixed asset investment stood at 802.8 billion yuan in 2018, higher than the 732 billion yuan planned, Shanghai Securities News said on Friday, citing sources. It was the fourth consecutive year since 2015 in which fixed asset investment breached 800 billion yuan.

The report said that aside from railway construction investment, the NDRC has approved a series of projects such as urban rail and airport construction with total investment of more than 1.2 trillion yuan since the fourth quarter of 2018. Moreover, local governments are accelerating the pace of investment in infrastructure construction, and their funds are also partly derived from bonds.

Mega IPO HK Que

State-owned China Tower ,which operates the telecommunications towers for mainland China telecommunication companies, raised at least HKD54.3 billion (USD6.9 billion) in its IPO today.

MSCI to Add China A Share in Index

Global index publisher MSCI will include 234 Chinese large cap stocks in its global and regional indexes from June 1, 218.

 

The 234 yuan-denominated stocks, or China A-shares, will represent an aggregate weight of 0.39% in the MSCI Emerging Markets Index at a 2.5% partial inclusion factor during the first step of the China entry. The second phase of the entry will take place in September, which will double A-shares’ aggregate weight to 0.78%.

 

In a quarterly review published earlier in the month, MSCI slightly altered the expected weighting that the Chinese stocks will have in MSCI’s emerging market index. It did not explain why some companies were added or removed.

 

China to Lower Bank Reserve Ratio

China’s central bank the People’s Bank of China (PBOC)  said on Tuesday it will cut the bank reserve requirement ratio (RRR) – currently at 17% for large institutions and 15% for smaller banks – by 100 basis points (bps).

The cut is effective on April 25 and applies to most banks, with the exception of policy lenders such as China Development Bank.

 

China to Merge its Banking and Insurance Regulators

China said it will merge its banking and insurance regulators, according to a parliament document released last Tuesday.

China will transfer some of the banking and insurance regulators’ roles to the central bank, the document showed.

– Reuters

 

The official publication of China’s central bank announced today that Guo Shuqing has been appointed head of the new regulator for the banking and insurance sectors.

Guo had been the head of the China Banking Regulatory Commission, which was merged with the China Insurance Regulatory Commission as part of a broader government reshuffle approved by parliament last week.

Caixin reported the appointment on Wednesday.

China Tech Giant Seeks Billion in USD Bond Rush

China tech giant joins USD bond rush run in the latest week. China’s tech firm Tencent was selling four tranches of bonds worth USD 5 billion on Jan. 19, according to the company’s announcement a week earlier.

 

The 4 tranches include 5-, 10-, and 20-year fixed-rate bonds at 2.985%, 3.595%, 3.925% respectively, and 5-year floating-rate bonds at 0.605% over three-month LIBOR.

 

The bonds selling plan is part of the company’s USD 10 billion medium-term bonds issuing plan announced in the previous week, according to China Xinhua News, “the global rating agency Moody’s has assigned a rating of A2, meaning low risk of default, to the Tencent bonds. The rating is one level below China’s business titan Alibaba’s bonds, issued last November”.

 

-Agencies

 

 

 

4T Corporate Debt Coming Due in China- Report

Chinese companies must repay 4 trillion yuan (USD614 billion) of bonds coming due this year, according to securities firm research. Chinese companies has an aggregate RMB 4 trillion coming due in 2018 and investors may also exercise options to sell an additional RMB 910 billion of securities back to issuers, Bloomberg reported citing Huachuang Securities research. There is a high probability investors who have options to sell back to property developer as well as local government financing vehicle bonds will do so, the report says.

 

– Agencies

China Developer Seeks USD 1 Billion

China Developer Seeks to Raise USD 1 billion from Hong Kong stock market.

The Hong Kong- listed China property developer posted its biggest decline in more than 27 months on a plan to raise funds, Sunac said it priced its 251.5 million share placement at the low end of a marketed range. It expects to raise nearly USD 1 billion.