MNI China Press Digest Feb 13: New Loan, Liquidity, Asset Mgmt

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

Tuesday:

     China's new loans issued so far in February are also sizeable following

January's record lending, Caixin reported citing banking sources. PBOC began to

give orders to banks to contain the size of new lending. Banks lent $460.7

billion new loans in Jan, up 396.24% from Dec; Banks usually lend more at the

start of the year to maximize interests and tap a strong demand, Caixin said.

Comment: PBOC wants to keep a strong rein on credit so as not to derail the

deleveraging campaign. The surge of new loans in January partly resulted from a

shortage of credit in the fourth quarter last year.

     China should monitor instances of liquidity shortage as it pushes forward

the financial deleveraging campaign, Securities Daily commented on its front

page. Recent capital market indicates liquidity issues. From Jan 25 to Feb 9,

the Shanghai Composite plunged about 12%, which can be attributed to the

monetary policy curbs, Daily said. Comment: It's expected that some within the

public opinion sphere will oppose the singular push by regulators. But since

President Xi Jinping has made it the top priority, it's unlikely that PBOC will

loosen the noose.

     China's asset-backed securitization (ABS) will expand at a rapid pace

benefitting from the new rules on assets management, the China Securities

Journal reported. More than CNY1 trillion ABS products were sold in 2017, the

first time ever, Journal cited China Central Depository & Clearing Ltd. As the

new rule will enhance restriction on non-standard products, the high-yield

standard products including ABS will be more attractive. Comment: As regulators

crack down on illicit off-balance-sheet transactions, ABS will be an effective

channel for financial institutions to move assets out of the balance sheet.

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]