MNI China Press Digest May 10: Local Govt Bond, WMP, Fin Trust

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

Thursday:

     Supply of local government bonds will surge in the coming months, China

Securities Journal reported. As the first four months saw a slower pace of local

government bond issuance compared with the same period in the last two years,

local governments are expected to speed this up later this year. The

debt-to-bond swap programme, started in 2015 with the aim of swapping all

existing government debt with government bonds by August this year, was the main

reason for this lower pace, as less new bonds were issued. 

***Comments: Ministry of Finance on Tuesday issued a guidance on local

government bond issuance, requiring that most governments' quarterly bond

issuance should be no more than 30% of the whole year. More issuances will come,

and the supervision on bond activities at the local level will increase.

     Some security brokerage companies have stopped selling wealth management

products for banks, Securities Daily reported. The change came after financial

regulators issued the finalized rules regulating WMP businesses, which forbid

such sales after 2020. However, other brokerage companies will keep selling

before the WMP rules take effect, the newspaper said. Yields of WMPs sold by

brokerage companies dropped rapidly, down from as high as 6.7% to the current

low of 2.4%. Both the new regulations and loose liquidity in the market led to

the drop, a manager at a brokerage company told the newspaper.

     The financial trust sector is facing large pressure from tight regulations,

Economic Information Daily reported. In the first quarter, issues of financial

trust products dropped 39.2% m/m, down 24.5% from a year ago, the newspaper

said, citing Wind Information. As the Chinese government is campaigning to

deleverage and control financial risks, financial trusts' lending to various

fields, especially the property market and their other businesses, has been

restricted, the Daily said. Yields of financial trust products are rising, and

are expected to keep rising, it said, quoting a financial trust professional.

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

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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