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CHIX

Global X China Financial ETF

6/20/2013, 2:17 AM ET

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Tuesday, June 18, 6:24 AM China's determination to reign in the rapid growth of credit is being tested by a short-term credit squeeze at banks, with rates in the interbank funding market soaring and foreign-capital inflows slowing. The banks want the People's Bank of China to inject liquidity by cutting the reserve-requirement ratio, but so far the PBOC is holding firm and maintaining the tight conditions. Comment! [Global & FX]
Monday, June 17, 4:29 PM Fitch continues to pound the table on China's shadow banking sector (previous). "We have no idea who the borrowers are, who the lenders are, and what the quality of assets is," Charlene Chu tells The Telegraph, adding that "we are already seeing defaults in trust products." Earlier this month, rumors of defaults on interbank loans spooked the market and sent the overnight rate soaring. A telling stat: Overall credit has doubled and then some to $23T since late 2008 meaning that "they have replicated the entire US commercial banking system in five years." (China financial ETF: CHIX) Comment! [Global & FX]
Monday, June 10, 1:37 PM "It is a wild west atmosphere in many respects," Fitch says, referring to the growing amount of credit extended by non-bank lenders in China where the rise of the shadow banking sector threatens to diminish the effectiveness of monetary policy and could put the country's sovereign rating at risk. "A 1% NPL ratio has little signaling value when 36% of all outstanding credit resides outside Chinese banks' loan portfolios," a senior Fitch director tells Reuters. (China financial ETF: CHIX) 1 Comment [Global & FX]
Tuesday, May 21, 9:46 AM China's official non-performing loan data ($86B in bad debt in Q1) "greatly understates" the extent of the problem, says Carson Block, believing the unwind will force Beijing to recapitalize a number of banks. Block's Muddy Waters recently made headlines with a short of Standard Chartered (SCBFF.PK, SCDRF.PK) - a U.K. bank earning most of its profit in Asia. China Financial ETF (CHIX) +32% Y/Y. Comment! [Global & FX, Financials]
Tuesday, April 16, 1:05 PM China's local government debt is "out of control," says Zhang Ke, head of a top Chinese accounting firm, and it could spark a bigger crisis than the U.S. property crash. He says his firm has mostly exited from the business of underwriting local government bond issues as the municipalities cannot service the debt they are taking on. "Things could become very serious." 8 Comments [Global & FX]
Thursday, April 11, 3:32 AM China's foreign exchange reserves climbed by $130B to $3.44T in Q1, the largest quarterly rise for almost two years. The inflow helped boost credit growth, with total new financing surging 58% on year to 6.2T ($1T). Bank loans rose 16% but those in the "shadow-banking" system, which have caused much concern, more than doubled. Comment! [Global & FX]
Tuesday, April 2, 10:09 AM China's Industrial Bank - the world's largest by market value - bids for 20% of Taiwan's Bank of Sinopac in what would be the first mainland investment in a lender on the island. The partnership will open up China's vast market to Sinopac - which currently fights for business in what is considered an "overbanked" Taiwan. EWT +1.1%. Comment! [Financials, Global & FX]
Thursday, March 28, 7:46 AM The China 25 Index ETF (FXI) falls 1.5% premarket as Beijing moves to break up the opacity of the shadow banking system with regulators demanding non-traditional wealth-management products be clearly linked to specific assets. Seems prudent. Citic Bank -6.8%, Minsheng Banking -7.9%. Banking ETF (CHIX) -6.1% YTD. 6 Comments [Global & FX, Financials]
Monday, March 4, 6:51 AM Shanghai plunges 3.7% after the government further cranks up property tightening measures, with a gauge of property developers falling 9.3%. "When there are new rules like these, it extends far beyond property shares," says an analyst. Industrial Bank -9.1%. FXI -1.8% premarket. Losses extend to Hong Kong, EWH -0.7% premarket, and the States, SPY -0.5%. 11 Comments [Global & FX, On the Move]
Tuesday, February 26, 7:49 AM Chinese banks (CHIX) tumble more than 2% after front-page commentary in the China Securities Journal suggests monetary policy needs to be tightened. Developers (TAO) doubled that decline as another report says Beijing has completed a draft of property tightening measures. The Hang Seng's (EWH) 1.3% slide puts it in the red for the year. Shanghai -1.4%. FXI -6% YTD. Comment! [Global & FX]
Wednesday, February 6, 7:21 AM Goldman Sachs President Gary Cohn remains bullish on China and its banks even after Goldman just unloaded part of its stake in Industrial Bank. "You can absolutely still make money off Chinese banks," he says (by selling?). "We are very optimistic, but cautious, about where China is going." CHIX +3.6% YTD. 1 Comment [Global & FX, Financials]
Tuesday, January 29, 1:03 PM Problem sovled? With strapped local governments lacking the means to make good on their massive borrowings, Chinese banks rolled over at least 75% of the maturing debt last year (interest only? option ARMs?). It begs a question: Who's rolling over the banks' borrowings? 2 Comments [Global & FX, Financials]
Friday, January 4, 7:29 AM Shanghai gains 0.4% in its first session of the new year, even as decliners led gainers by a 2:1 margin. Leading gains were the insurers - Ping An +4% - after regulators moved to allow them to set up mutual funds. FXI -1% premarket. Comment! [Global & FX]
Friday, December 14, 2012, 7:13 AM Stock markets don't soar 4.3% on the back of middling flash PMI reports. Shanghai's moonshot overnight is likely more to do with institutional investors and state-owned firms (mostly one and the same in China) jumping all at once into a market trading at 2009 levels. With HSBC pushed aside, Ping An insurance gained 8% amid speculation it's boosting its position in equities. Financial shares (CHIX) overall gained 6.7%. FXI +1.8% premarket. 1 Comment [Global & FX]
Tuesday, December 11, 2012, 8:31 AM China new yuan loans totaled ¥522.9B in November, trailing forecasts for ¥550B and last year's amount of ¥562.2B. M2 money supply growth was 13.9%, lower than an expected 14.1%. The slowish data combined with better-than-expected industrial output and retail sales numbers will likely keep interest rates on hold. Comment! [Global & FX]
Wednesday, December 5, 2012, 7:14 AM Shanghai soars 2.9%, with chatter about plans for speeding up the "urbanization" process coming out of a Poiltburo meeting as good an excuse as any for the big move. Industrial firms (CHII) lead, including Sany Heavy Industry +10% and Anhui Conch Cement +4.8%. Financials shares (CHIX) had a big move after Beijing eliminates a rule limiting investment in banks by insurers. Comment! [Global & FX]

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