A group of city-based investment........>

CHINA PRESS: A group of city-based investment companies have announced that they

will no longer act as local government financing vehicles (LGFV) so that they

have more flexibility to raise and invest funds, the 21st Century Business

Herald reported Wednesday. According to government regulations, investment

companies are not allowed to raise funds in overseas markets unless they have

promised not to act as LGFVs. In addition, companies cannot invest in

cooperative projects between local governments and private investors if they

issue local government bonds. But analysts think the withdrawal of some finance

companies will not have a large impact on the outstanding volume of local

government debt issued by LGFVs, as the bonds are backed by the local

governments. And the withdrawals do not mean these companies will sever all

their connections with local governments since the governments are often

share-holders and can subsidize the finance companies via other business

dealings, the report noted. (21st Century Business Herald)