MNI China Press Digest March 30: Liquidity;Property;Regulation

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

Friday:

     The newly established China Banking and Insurance Regulatory Commission

held a meeting on Thursday emphasizing it will orderly help to lower leverage

ratios of companies, break down shadow banking, prevent the property sector from

accumulating bubbles, and help to deal with local government implicit debts,

reported the Securities Times on Friday. The banking and insurance sector will

further reform and open up, the report said.

     Funding costs in property sector through bank loans and bond issuance were

between 4% - 5% in 2017, much lower than funding cost via trusts, which were

mostly between 6% - 10% and even as high as 11%, Securities Daily reported on

Friday, according to the annual reports published by listed property companies.

As the funding channels have been restricted, property companies might seek more

funding from trusts, which will push up their funding costs, the report said.

     The PBOC has drained liquidity via its open market operations for eight

consecutive trading days as of Thursday, causing liquidity to tighten slightly

and non-bank financial institutions to face funding pressures, China Securities

Journal reported on Friday. The report cited sources that said at the root of

this problem are banks, which are facing regulation tests at month-end, and are

becoming unwilling to lend out money to those NBFIs. However, as the total

amount of liquidity is not low and the banks' liquidity conditions remain

stable, it is not likely for liquidity to become much tighter, and liquidity

conditions will improve in the beginning of April, the report said.

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

--MNI Singapore Bureau; +65 8233 2326; email: Asia-Editor@marketnews.com

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