Friday, August 14, 2020

Mid-Year Review on Chinese LGFVs: Proactive Policies Mitigate Impact of the Economic Slowdown and...

Overview of Chinese LGFV Offshore USD Bond Issuance The total issuance amount of Chinese LGFV offshore USD bonds recorded about a 45.5% decrease to USD7.8 billion and the number...

Mid-Year Review on Chinese Property Developers: A Tale of Two Cities

Overview of Chinese Property Developers Offshore USD Bond Issuance Total offshore USD bonds issuance amount by Chinese property developers recorded a year-on-year decrease of c. 8.2% to USD25,791 million...

Chinese Local Government Update: The Yancheng Municipal Government

Ongoing Economic Structural Transformation Although GDP Growth Slowed Down Yancheng is a municipal city under Jiangsu province. Yancheng’s GDP growth further slowed to 5.1% in 2019, compared with Jiangsu’s 6.1% and China’s 6.1%. Yancheng’s economic...

Chinese Local Government Update: The Qingdao Municipal Government

Ongoing Economic Structural Transformation Although GDP Growth Slowed Down Qingdao is a municipality with an independent planning status enjoying provincial-level status in the economic planning and independent budgetary status directly linked to the central government....

Chinese LGFV Offshore US Dollar Bond Market: The Impact of COVID-19 Epidemic on Highly-Rated...

Concerns over the potential negative impact of the COVID-19 epidemic on the global economy caused significant pressure and fluctuation in the capital markets worldwide in 1Q 2020 as investors were rushing for safety by...

2020 Chinese Offshore USD Bond Investor Survey Report (Part Two)

The 2020 Chinese offshore USD bond investor survey is based on data and feedback collected from 32 one-on-one interviews with Chinese offshore USD bond investors of which 30 are based in Hong Kong and...

2020 Chinese Offshore USD Bond Investor Survey Report (Part One)

Part A: Survey Population Characteristics The 2020 Chinese offshore USD bond investor survey is based on the data and feedback collected from 32 one-on-one interviews with Chinese offshore USD bond investors of which 30 are...

China’s Economic Structural Adjustment Encountered Virus Outbreak, Short-term Fluctuation Will Not Affect Long-term Economic...

Since around the beginning of 2020, China has encountered a new type of coronavirus pneumonia ("COVID-19") epidemic and it remains unclear when the epidemic will be under control. The transmission speed of COVID-19 is...

中国经济结构调整偶遇疫情 短期波动不改长期经济发展趋势

2020年辞旧迎新之际,中国遭遇新型冠状病毒肺炎(“COVID-19”)疫情,随着疫情发展,关于疫情何时可以得到控制目前无法得到确切定论。2020年COVID-19与2003年SARS的传染速度不同,因当前公共交通更加便利,迁移人口数量巨大,对疫情传染的防控和地方卫生体系应对突发卫生事件的能力提出巨大挑战。。。。。。 了解更多

Coronavirus Fuels the Pace of Change in the Industry Dynamics for Chinese Property Developers

Coronavirus outbreak, which began in China in December 2019 and has since spread across multiple regions, is affecting various economic activities in China. We believe Chinese property developers will experience decrease in contracted sales...

Chinese Property Developers 2020 Outlook: Possibly A Watershed Year

2020 may turn out to be a watershed year for Chinese property developers as they face a slowing economy, regulatory constraints both on financing and demand ends, as well as intensified competitions within the...

China LGFV 2020 Outlook: Fiscal Stimulus to Support China’s Economy Will Underpin LGFVs’ Credit...

China has reembraced the investment-driven growth model since 2H2018 to boost its economy, which reported a slowing year-on-year GDP growth of 6% in 3Q2019. We believe that local governments’ direct funding capacity will remain...

Factors to Consider When Analysing the Credit Profiles of Chinese LGFVs

Lianhe Global examines a basket of elements when analysing the credit profiles of China’s Local Government Financing Vehicles (“LGFVs”). In this commentary, we highlight some of the key factors which are important for a...

Counter-cyclical Measures Benefit China’s Bond Market

In order to support the real economy and reduce financing cost, China’s central bank announced a reduction of the required reserve ratio (“RRR”) for most financial institutions by 0.5% on 16 September 2019. City...

China’s Domestic Spending Plans Underpin LGFVs and Property Developers’ Credit Story

In a bid to boost China's economy, the government has rembraced the investment-driven growth model. Lianhe Global lays out what this means for the country's property sector and LGFVs. The ongoing trade war between the...

Offshore US Dollar Debt Market 2Q2019 Review: Record issuance in the primary market but...

Since the second quarter of 2019, the Fed’s policy stance has turned dovish which pushes down yields on the US dollar denominated debts including offshore debt issued by onshore Chinese entities. The yield spread...

1H 2019 Review and 2H 2019 Outlook on the Panda Bonds Market – Volume...

After four consecutive rate hikes in 2018, the U.S. Federal Reserve took a slight turn in the direction of its monetary policy in 1H 2019, with interest rates remained unchanged post the January and...

Onshore LGFVs 1H2019 Review: Policies and financing environment remained accommodative but credit polarization among...

In 1H2019, monetary and macroeconomic policies remained accommodative with adequate liquidity in the market which improved the financing of LGFVs marginally. Overall policies on LGFVs remained restrictive and resolute steadfastly to resolve their implicit...

Factors to Consider When Analysing Chinese Property Developers

Lianhe Global examines a basket of elements when analysing Chinese property developers. In this commentary, we would like to highlight some of the key factors for investors’ attention: 1. Strategic partners/investors We believe large and...

Mid-Year Review on Chinese Property Market Trend

Lianhe Global believes that contracted sales of Chinese property developers will experience a decelerated growth in 2019 as the Chinese government has placed restrictive measures on home purchases, selling prices, and mortgage financings to...

Lianhe Global Expects China to Ensure a Suitable Monetary and Financial Environment to Support...

Private enterprises, especially micro and small-sized enterprises, generally face greater difficulties in accessing credit facilities compared with state-owned entities in China. The challenges have become more prominent since 2018 due to the complicated economic...

Recovery Research of 2018 Onshore RMB Bond Defaults

As of end-2018, the overall recovery rate in the onshore public bond market was around 15.46%, which was lower than the rate in 2017 (28.11%). The decrease in the recovery rate was mainly due...

1Q2019 Chinese Offshore USD Bond Research Report

The US Treasury yields declined rapidly in the first quarter of 2019 which to some extent reduced the issuance costs of Chinese offshore USD bonds. The implementation of monetary easing policies by the Chinese...

2018 Annual Report on Green Bonds in China

The China green bond market grew moderately and the amount of green bonds issued totalled RMB220.9 billion with a year-on-year growth rate of 7.48% in 2018. In China, green bonds covered most types of...

2018 Annual Research Report on Asset-Backed Securities Market in China

The issuance amount of asset-backed securities (“ABS”) increased significantly to RMB1,995.2 billion with year-on-year growth of 5 billion in 2018. 1,762 of the total 2,660 issued ABS were assigned credit ratings, among which ABS...

China Onshore Bond Market 2018 Default Study and 2019 Outlook

40 issuers defaulted for the first time in China bond market in 2018, which reached a historic high and involved 106 defaulted bonds totalling approximately RMB86 billion. This significant increase in bond defaults could...

青海省投资集团 — 地方政府融资平台还是国有企业?

青海省投资集团有限公司 (“QPIG” 或 “该公司”) 因未能按期支付2019年2月22日的利息而备受瞩目。联合国际依据公开信息对QPIG的性质进行了评估。 了解更多

QPIG- Is it a LGFV or SOE?

Qinghai Provincial Investment Group (“QPIG” or “the company” or in Chinese “青海省投资集团有限公司”) is under the spotlight for missing its interest payment on 22 February 2019. QPIG had a prior incident of nearly missing scheduled...

2019 Chinese Offshore USD Bond Investor Survey Report

The 2019 Chinese offshore USD bond investor survey is based on the data and feedback collected from 24 one-on-one meetings with Chinese offshore USD bond investors in Hong Kong. The survey took place between...

Offshore Investors’ Top 10 Questions about the Credit Profiles of Chinese Bond Issuers

Lianhe Global has been outreaching to both the Chinese and international investors in the past several months. The investor population includes banks, asset management under banks, insurance and pure asset management companies. Most investors...

Chinese Government’s Eased Attitude Towards LGFVs’ Financing Activities Underpins Their Credit Profiles

Financing policies for China’s local government financing vehicles (“LGFVs”) have been eased since 2H2018 due to the dynamic condition of China’s macroeconomy and the financial system. China’s regulatory authorities put risk prevention as their...

2019 Credit Outlook for China Financial Leasing Sector

China Lianhe’s Viewpoints on the China Financial Leasing Sector • Shareholder support and resilience and stability of financial leasing companies’ operation are key considerations in assessing China financial leasing sector’s credit profiles. • Business growth has...

2019 Credit Outlook for China Property Developer Sector

China Lianhe’s Viewpoints on the Chinese Property Developer Sector Amid the spectre of the Sino-US trade tension, a slowing economy and a teetering property market, we believe the policy stance is likely to moderate from...

中国中小银行的信用状况受对影子银行和地区依赖性的影响而存在分歧

中国中小银行(包括股份制银行和城市商业银行)一直积极开展影子贷款活动(如另类投资和表外理财产品),并提供信贷以支持区域经济发展。这导致它们的业务增长强于大银行而在银行体系中市场份额增加,系统重要性提高和信用状况分化。 了解更多

The Chinese Government to Maintain Adequate Market Liquidity for Infrastructure Investments to Stimulate Economic...

The Chinese government is unlikely to roll out any massive stimulus plan but instead, it will use available tools to fine-tune its policy goals to maintain economic growth with a particular focus on investing...

Chinese Property Developers Under the Spotlight of New Financing Policies

China Lianhe’s Viewpoint on the Chinese Property Developer Industry • Chinese Property Developers Face a Wall of Maturing Debt in 2018-2020 Chinese property developers have been relying on short-term debt to finance their operating activities, we...

The Odd Couples: Chinese Property Developers and Local Governments

China has a unique economic structure with features of both market and planned economies. The Chinese central government uses monetary policy, as well as administrative tools to steer the direction and the pace of...

Reserve Requirement Ratios Reduction Alleviates Bond Market Risks

On 7 October 2018, the People’s Bank of China (PBOC) announced a plan to reduce the Reserve Requirement Ratios (RRR) by 1.0% for large commercial banks, joint stock banks, city commercial banks, non-county rural...

China’s Small and Medium-Sized Banks’ Credit Profiles Diverge on Shadow Banking and Regional Dependences

China’s small and medium-sized banks (including joint stock banks and city commercial banks) have been active in shadow lending activities (such as alternative investments and off-balance-sheet wealth management products (WMPs)) and in providing credits...

Perceived Weaker Support Strains China’s Local Government Financing Vehicles

China’s Local Government Financing Vehicles (“LGFVs”) have incurred higher funding cost amid tightened regulations on their debt financing and perceived lower possibility of support from their respective local governments(“LGs”) in case of need. Investors’...