MNI China Press Digest, May 31: Mortgages, Investment, ABS

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

Thursday:

     Mortgage rates continued to rise in May as bank funding costs increased and

policies aimed at controlling the property market begun to bite, reported the

21st Century Business Herald. The average mortgage rates for first apartments

and second apartments rose to 5.56% and 5.92% respectively, said Li Weiyi,

analyst at Rong360, an internet loan platform. Mortgage rates showed diverging

trends in first-tier cities and second- and third-tier cities, being relatively

stable in first-tier cities while rising in second- and third-tier cities where

the property market has become hot in areas such as Huizhou, the report said.

     25 provinces have published their investment plans on major programs this

year, with 10 provinces planning to invest a total of more than CNY1 trillion,

Economic Information Daily reported. In general, the scale of investment in 2018

is large and up from last year, said Zhu Zhenxin, the chief analyst at Reality

Institute of Advanced Finance, cited by the report. Compared with past

investment plans, this year's investment plans emphasize more environmental

protection projects and hi-tech projects, suggesting higher investment quality,

the report said. The number of public-private partnership projects planned has

decreased significantly from last year, which should help to prevent debt risks

and promote the sustainable growth of local economies, said Wang Zhigang,

analyst at Chinese Academy of Fiscal Science.

     Many property developers have managed to raise funding using asset-backed

securities (ABS) as bank lending to the sector and bond issuances has become

more difficult, China Securities Journal reported. As of the end of April, a

total of CNY150.9 billion ABS had been issued by property developers, the report

said, citing data from Hua Chuang Securities. Property developers have been more

motivated to issue ABS compared to bonds as issuing ABS can lower their leverage

ratios, minimize the impact on the rating of the issuer, and optimize their

balance sheets, the report said, citing a source working at an ABS department in

a securities brokerages.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

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

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