China Press Digest: Friday, September 1

     BEIJING (MNI) - The following are highlights from the China press for

Friday, September 1:

     The State-owned Assets Supervision and Administration Commission (SASAC)

said some 300 zombie enterprises would be eliminated or integrated into other

companies by the end of this year, the Securities Daily reported Friday. In

2016, the commission dealt with 171 zombie companies through restructured or

other measures and improved the performance of 249 companies which had extremely

poor performances.  This led to an increase in efficiency worth CNY51.2 billion,

according to the newspaper, including the dismissal of 120,000 employees. The

Commission's will continue to reduce the leverage of state-owned enterprises and

dispose zombie companies. (Securities Daily)

     Small to medium-sized financial institutions will face new pressure in

September when a large volume of negotiable certificates of deposit (NCDs) will

mature, especially after the PBOC's announcement on Thursday prohibiting

commercial banks from issuing NCDs with a maturity of more than a year, the

China Securities Journal reported Friday. As of Thursday, the volume of NCDs

that will mature in September stood at CNY2.3251 trillion, the largest amount

since December 2013, the newspaper said. Sun Binbin, analyst at Tianfeng

Securities, said the PBOC measure curbing long-term NCDs shows regulators will

continue to tighten rules on bank activities, so banks must make more changes to

their portfolio of assets to be able to pass the assessment of the appropriate

ratio of NCDs in their overall liabilities. Analysts  quoted by the newspaper

noted that because small to medium-sized banks are most active in issuing NCDs,

they would be impacted the most by the PBOC change. (China Securities Journal)

     The turning point in the development of Chinese banks came earlier than

expected, and banks' businesses are healthier as a result, The Securities Times

said in a front-page commentary Friday. Based on first-half reports, Chinese

banks' performances were relatively good, especially the big state-owned banks.

Many indicators were better-than-expected, with net profit of the four big banks

rebounding and showing significant growth. China's robust economic development

has stimulated the financing needs of the real economy, and higher financing

costs caused by market liquidity fluctuations also contributed to the growth of

bank profits. Banks' initiatives to speed up their restructuring, as well as

their efforts to reduce costs, are also important reasons for their better

performance. (The Securities Times)

     Chinese listed property companies hold large amounts of cash at the moment,

with the largest firms holding more than CNY100 billion each, but this situation

is unlikely to continue due to funding issues later this year, the 21st Century

Business Herald reported Friday. Property sales in the first half were robust

and property companies added to their cash holdings by swapping short-term loans

for long-term credits, the newspaper said. But as the property sector continues

to cool and financing channels tighten further, property companies will face

obstacles in obtaining funding, which is likely to require them to spend some of

their cash. The peak time for the maturity of bonds they have issued is

approaching. In mid-2017, the ratio of long-term debt of 128 property companies

stood at 30.85% and was almost 70% for short- and medium-term debt, the

newspaper, citing data from Wind Information. An anonymous property professional

told the newspaper that the government is unlikely to loosen controls on the

property sector, so there's a low chance for an upward trend in the sector at

the end of the year. (21st Century Business Herald)

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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