News

Chinese deleveraging to hurt small builders

China_property_developersInvestors have been advised to avoid corporate bonds issued by small property developers in China in favour of bonds from larger issuers in the sector. An analyst at NN Investment Partners made the recommendation after observing that state-owned enterprises (SOEs) in China have been told to reduce their debt levels as part of a government policy to deleverage. “In June, I travelled to Hong Kong and elsewhere in China to meet corporate issuers and visit some property projects,” said Clement Chong, senior credit analyst. “The tone seemed more cautious than a year ago; deleveraging and liquidity have become more serious corporate concerns. My meeting with a number of non-property SOEs revealed that the Chinese authorities had instructed them to deleverage with the goal of reducing gearing by 2-3 percentage points by 2020.” Small property developers are likely to be hit especially hard by the shrinking availability of lending, said Chong. “In an environment of tight funding conditions, lenders would most naturally prefer larger, investment-grade issuers or SOEs with government backing. Smaller or weaker companies, often high-yield, may become part of the collateral damage.” ©2018 funds global asia

Executive Interviews

INTERVIEW: Operational challenges

Jun 09, 2018

Caroline Higgins of Northern Trust tells George Mitton about A-share inclusion, ETF Connect and why Cayman funds predominate in the region.

INTERVIEW: Making a name

Apr 18, 2018

Formed by a merger in 2012, Old Mutual Global Investors was little-known in Asia. Carol Wong, managing director for Asia-Pacific, is changing that. She talks to George Mitton.

Roundtables

SINGAPORE ROUNDTABLE: Optimism versus caution

Oct 23, 2018

The impact of financial technology, developments in Asian passporting and the promise of new markets in Thailand were among the topics discussed by our panel. Chaired by George Mitton in Singapore.

HONG KONG ROUNDTABLE: a long-term project

Jun 09, 2018

Our panel discussed robo-advisers, ETF Connect, and why the mutual recognition of funds (MRF) scheme will take time to develop. Chaired by George Mitton in Hong Kong.