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MNI China Press Digest November 2: New Loans, PSL, Developers

MNI (Singapore)
MNI (Beijing)

The following lists highlights from Chinese press reports on Wednesday:

  • China’s new yuan loans and aggregate finance may see a seasonal decline in October after banks accelerated lending at the end of Q3 to meet regulatory requirement, thereby satisfying some of October's demand, the Securities Daily reported citing Wang Qing, chief analyst at Golden Credit Rating. Wang estimated new loans will reach CNY930 billion, compared to September’s CNY2.47 trillion, while aggregate finance may slow to CNY1.4 trillion from the previous CNY3.53 trillion, the newspaper said. New loan growth will continue to be supported by increased medium- and long-term corporate bonds amid government support for infrastructure and manufacturing investment, but weak spending remains a drag on mortgage and consumer loans, Wang was cited as saying. The central bank is set to release the latest financing data between November 11-15.
  • The People’s Bank of China’s Pledged Supplemental Lending (PSL) facility increased a net CNY154.3 billion in October, accelerating from September’s CNY108.2 billion, the 21st Century Business Herald reported. PSLs were provided to three policy banks to help boost lending in targeted areas, with the PBOC providing funds equal to 100% of the loan principal, the newspaper said. Some analysts believe the PSL was used to help property developers deliver unfinished projects or to fund infrastructure construction of underground pipeline and water conservation projects, the newspaper said.
  • Several private property developers including Longfor and Country Garden are promoting their second round of bond issuance with credit enhancement by China Bond Insurance Co Ltd, sending a positive signal about the stability of bond financing channels for private developers, the Securities Times reported. China Bond Insurance has promoted more than 10 credit enhancement to help developers raise CNY8.37 billion in bond sales, driving a total of CNY15.5 billion of debt financing, the newspaper said. This should encourage commercial banks and other financial institutions to restore loans and investments in private developers, the newspaper said.
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