Chinese Media: Infrastructure loans soar, more foreign A-share demand.
The Asia Times collects local news from the Chinese media. Below are two insightful articles, on increasing Chinese credit and the foreign buying of A-Shares.
Yuan loans for construction soared in July
New yuan loans have increased by 1.45 trillion yuan (US$210 billion) in July, a rise of 623.7 billion yuan from a year earlier, The Paper reported.
Currently, banks and insurances companies are encouraged to increase credit supply and provide the real economy with more financing supports, especially in the infrastructure sector.
Thus, new yuan loans in the infrastructure industry in July reached 172.4 billion, an increase of 46.9 billion yuan over June.
The performance of off-balance sheet financing, such as trust loans and entrusted loans, remains relatively flat.
Also, an increasing number of non-performing loans have been written off to free up more credit space.
In the first half of the year, banks have dealt with 800 billion yuan in non-performing loans, which was 166.5 billion yuan more than the same period of the previous year.
A-share market sees more foreign capital inflow
New data from cmsmc.com indicates the inflow of foreign capital into the Chinese A-share market has been accelerating, The Paper reported.
Over the first seven months of the year, foreign investors recorded a total net purchase of A shares worth 169.16 billion yuan (US$24.64 billion) via the Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, Qualified Foreign Institutional Investor System and RMB Qualified Foreign Institutional Investor System — significantly higher than that of the same period last year.
With the exception of February, the amount of monthly net purchase of A shares has exceeded 13 billion yuan (US$1.89 billion) during this period.
According to Haitong Securities, as of the end of July, the value of A-share stocks held by foreign investors accounted for 6% of the total value of the A-share market.
Insiders think the attractiveness of the Chinese economy, the opening up of the Chinese capital market as well as the valuation of A-shares are important factors in attracting foreign capital.
At present, A-share stocks’ price-earnings ratio and risk are at a relatively low level. Under this circumstances, it is wise for foreign investors to accelerate their investment in A-shares, said Xia Chun, chief research officer of Noah Holdings.