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China puts margin financing under scrutiny as stock market froth evokes memories of 2015 rout

China’s stock market regulator is increasing scrutiny of leveraged buying funded by non-brokerage platforms, as it takes pre-emptive measures to ward off risks that could result in a repeat of the 2015 crash.Branches of the China Securities Regulatory Commission in Zhejiang and Guangdong provinces held meetings recently with securities firms, asking them not to offer any service that will enable outside institutions to lend money to investors for stock trading.Brokerages have been banned from… Source link

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Apple teams with Ant Financial, banks for interest-free iPhone financing in China

Apple has teamed up with Chinese payments giant Ant Financial Services Group and several local banks to offer interest-free financing, its first such move in the country as it looks to boost waning smartphone sales.The US tech behemoth issued a rare revenue warning last month citing weaker iPhone sales in China, one of its most important markets, where consumer spending has taken a hit due to a slowdown in economic growth.On its China website, Apple is promoting the new scheme, under which… Source link

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As China gets used to buying on credit, it remains important for GM financing arm even as new car sales soften

As concerns are increasing about rising delinquency rates among car buyers in the United States, GM Financial, the car loans arm of US carmaker General Motors, is increasingly looking to mainland China for potential growth. Not only is China the world’s biggest market for car purchases, but Chinese buyers make larger down payments and pay off their loans quicker than their US counterparts when they borrow money for new or used cars. Beijing, pushing its electric vehicle market, is making it harder for start-ups to enter as it fights overcapacity…

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Veggie ‘meat’ start-up backed by Nasa wins financing from tech moguls and Silicon Valley climate fund

A Chicago-based biotechnology company working with Nasa to develop a new form of plant-based protein fit for supporting space exploration has received US$33 million from venture capital firms, including an energy tech fund backed by Bill Gates, Jack Ma and Jeff Bezos. The funding will support the development and commercialisation of the animal protein alternative, according to Sustainable Bioproducts co-founder and chief executive Thomas Jonas. The climate-friendly protein is a product of research into extremophile organisms that live in Yellowstone National Park’s volcanic springs. “That work led to the development…

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China 

China’s central bank adds local government bonds into calculation for social financing

China’s central bank has changed the way it calculates how much money flows into the real economy to reflect recent changes in the availability of local government funding. Total social financing – a figure calculated monthly that previously comprised bank loans, corporate bonds and initial public offerings – is one of the most watched indicators as it provides a reading of how much money is flowing from the financial system into factories, infrastructure projects, farms and shops. If the number is growing, it is largely seen as the central bank…

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To solve China’s Belt and Road financing problem, Hong Kong looks to infrastructure loan-backed securities

The Hong Kong Mortgage Corporation is planning to securitise infrastructure loans and channel funds into China’s Belt and Road Initiative, the chief of the city’s de facto central bank has said. A lack of structured, bankable infrastructure projects has created a huge gap between the financing needs of emerging markets and the “trillions” of dollars in capital looking for investment opportunities, Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, told the Belt and Road Initiative: Infrastructure Financing Forum in Hong Kong on Monday. CLSA to follow China’s…

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Investment 

Hong Kong securities watchdog proposes cap on margin financing as risks rise to worrying levels

Hong Kong’s securities watchdog has proposed a new cap on margin financing by brokerages to investors as the risks have risen to worrying levels, but brokers are concerned that the new rules would reduce market liquidity. Under the proposal released on Friday as part of a two-month consultation until October 18, the Securities and Futures Commission (SFC) will impose restrictions on brokers, which stipulates that their total margin financing loan offered to clients to buy stocks, must be between two to five times their respective capital. This compares with four…

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