Welcome!

News Feed Item

FXPRIMUS Market Brief of the Week: More Stringent Rules to Curb Chinese Shadow Banking Activities May Come

SINGAPORE, SINGAPORE -- (Marketwired) -- 02/24/14 -- In FXPRIMUS' Market Brief of The Week for 24 February, the brokerage firm's Senior Economist, Jimmy Zhu, looks at Chinese banking regulators' comprehensive exercise in curbing shadow banking.

Economic Insights

Chinese Equities Slumped on Slowing Home Prices, Liquidities Withdrawal

Chinese banking regulators have been carrying out a comprehensive examination on its wealth management products. The China Banking Regulatory Commission (CBRC) required banks in different provinces to provide solutions on ways to curb shadow banking activities. The cross-sector inspections intend to find out the root problem, even if it will get legal jurisdictions of the banks involved.

Chinese lenders, including Agricultural Bank, Bank of Communications, China Merchants and Citic, suspended loans to developers for supplies and constructions until the end of March, or even longer according to news or rumours these days. This may make it harder for developers to refinance maturing bonds and trusts, which could create financial-system risks if there are any. Developers have 33.7 trillion Yuan of offshore bonds. About 6.6 trillion Yuan property trusts may mature in 2014. We know that this group of companies are very active in shadow banking sectors, supported by issuance of large amount of wealth management products.

The People's Bank of China (PBOC) also redeemed 450 billion Yuan of reverse repos from banks last week, showing its determination to maintain stable Chinese money markets following January's 23% jump in new loans. The central bank injected the same amount of liquidity during previous two weeks. Reverse repos emerged as the PBOC's key policy tool in managing short-term market liquidity. From the reaction of money markets, investors did not view it negatively, as the 7-day repo rate recently dropped.

To view the figure accompanying this press release, please visit the following link:

http://media3.marketwire.com/docs/fxp224-F1.pdf

Since third quarter last year, we have been talking about relevant regulatory authorities to rectify shadow banking industry, and relevant rumours spread like wildfire. Subsequently it has been exposed by the media on strengthening of shadow banking issues related notice (No. 107 & 108 documents).

China's efforts to deleverage its economy may be threatened by a jump in Yuan loans. New Yuan loans surged 23% YoY last month to 1.3 trillion Yuan, helping to boost total outstanding loans to 30 trillion Yuan from 14.3%, possibly because the bank regulator aimed to maintain market funding amid a trust-loan slump. Still, any growth above 14% for all of 1Q could boost the loan-to-GDP growth multiplier to 1.9x from 1.8x in the last two quarters, based on estimated consensus. China's social financing only increased 1.4% YoY in January to 2.6 trillion Yuan. Trust loans tumbled 49% and corporate bonds fell 85%, overshadowing the 23% jump in new loans. Trust loans and bonds' share of social financing also dropped to 5.9% from 17.1% last year. A government clampdown on shadow banking and tight liquidity may weigh on corporate funding this year.

The spread between three-month Shibor and Overnight Index Swap has widened to 170 Basis Point (BPS) from 104 BPS three month ago and 115 BPS six months ago because of a surge in Shibor. The interbank rate jumped to 5.6% from 4.65% three month ago and 4.69% six months ago because lenders are asking for higher risk premiums, which suggested concerns about possible insolvencies. The PBOC's acceptance of money-market volatility may heighten these fears.

Top news this week


U.S. New Home Sales
I expect figures to come in at 400K
U.S. Pending Home Sales MoM
I expect figures to come in at -7.5%

ABOUT FXPRIMUS

FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools. FXPRIMUS truly is The Safest Place To Trade.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
Advances in technology and ubiquitous connectivity have made the utilization of a dispersed workforce more common. Whether that remote team is located across the street or country, management styles/ approaches will have to be adjusted to accommodate this new dynamic. In his session at 17th Cloud Expo, Sagi Brody, Chief Technology Officer at Webair Internet Development Inc., focused on the challenges of managing remote teams, providing real-world examples that demonstrate what works and what do...
As enterprises work to take advantage of Big Data technologies, they frequently become distracted by product-level decisions. In most new Big Data builds this approach is completely counter-productive: it presupposes tools that may not be a fit for development teams, forces IT to take on the burden of evaluating and maintaining unfamiliar technology, and represents a major up-front expense. In his session at @BigDataExpo at @ThingsExpo, Andrew Warfield, CTO and Co-Founder of Coho Data, will dis...
When building large, cloud-based applications that operate at a high scale, it’s important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. “Fly two mistakes high” is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee...
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, will discuss how the ability to access and analyze the massive volume of streaming data from mil...
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, will discuss using predictive analytics to ...
WebSocket is effectively a persistent and fat pipe that is compatible with a standard web infrastructure; a "TCP for the Web." If you think of WebSocket in this light, there are other more hugely interesting applications of WebSocket than just simply sending data to a browser. In his session at 18th Cloud Expo, Frank Greco, Director of Technology for Kaazing Corporation, will compare other modern web connectivity methods such as HTTP/2, HTTP Streaming, Server-Sent Events and new W3C event APIs ...
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
At first adopted by enterprises to consolidate physical servers, virtualization is now widely used in cloud computing to offer elasticity and scalability. On the other hand, Docker has developed a new way to handle Linux containers, inspired by version control software such as Git, which allows you to keep all development versions. In his session at 17th Cloud Expo, Dominique Rodrigues, the co-founder and CTO of Nanocloud Software, discussed how in order to also handle QEMU / KVM virtual machin...
SYS-CON Events announced today that FalconStor Software® Inc., a 15-year innovator of software-defined storage solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. FalconStor Software®, Inc. (NASDAQ: FALC) is a leading software-defined storage company offering a converged, hardware-agnostic, software-defined storage and data services platform. Its flagship solution FreeStor®, utilizes a horizonta...
Silver Spring Networks, Inc. (NYSE: SSNI) extended its Internet of Things technology platform with performance enhancements to Gen5 – its fifth generation critical infrastructure networking platform. Already delivering nearly 23 million devices on five continents as one of the leading networking providers in the market, Silver Spring announced it is doubling the maximum speed of its Gen5 network to up to 2.4 Mbps, increasing computational performance by 10x, supporting simultaneous mesh communic...
Sensors and effectors of IoT are solving problems in new ways, but small businesses have been slow to join the quantified world. They’ll need information from IoT using applications as varied as the businesses themselves. In his session at @ThingsExpo, Roger Meike, Distinguished Engineer, Director of Technology Innovation at Intuit, showed how IoT manufacturers can use open standards, public APIs and custom apps to enable the Quantified Small Business. He used a Raspberry Pi to connect sensors...
Father business cycles and digital consumers are forcing enterprises to respond faster to customer needs and competitive demands. Successful integration of DevOps and Agile development will be key for business success in today’s digital economy. In his session at DevOps Summit, Pradeep Prabhu, Co-Founder & CEO of Cloudmunch, covered the critical practices that enterprises should consider to seamlessly integrate Agile and DevOps processes, barriers to implementing this in the enterprise, and pr...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...