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New Straits Times
7 days ago
- Business
- New Straits Times
Shanghai bourse gives bond investors a taste of high yields with new framework, sources say
SHANGHAI: The Shanghai Stock Exchange plans to facilitate more companies to issue bonds and attract investors with a new framework for such issuances, two sources said, as China looks to boost funding options for the private sector to revive its economy. Fifty-three bonds worth 37 billion yuan (US$5.20 billion) have been sold so far under the new mechanism, which was quietly launched as a pilot late last year, said the sources with direct knowledge of the exchange's scheme. The deals were made possible after companies under the new framework, which excludes developers and financial firms, were required to make more timely disclosures about their businesses and bolster measures to protect investors, they added. The aim is to double the issuance number this year, said the sources. Underwriters for these deals have been asked to play a more proactive role in creating demand by facilitating trading of the bonds in the secondary market, said the sources, who declined to be named as they were not authorised to speak to the media. These measures highlight Beijing's efforts to address a mismatch in China's 33 trillion yuan corporate bond market, where state enterprises dominate. Currently, private issuers account for just 2.4 per cent of China's credit bond market, compared with 95 per cent for state-owned companies, according to Shenwan Hongyuan Securities. Beijing has vowed to broaden the financing pipeline for the private sector, which contributes more than 60 per cent of economic output and over half of tax revenue, especially as it looks to cushion the impact of Sino-US tensions on the domestic economy. Investors typically do not consider onshore bonds of private firms as an investment option, as they seek safety in notes issued by state-owned enterprises (SOEs) and financial firms, said one of the sources. At the same time, "investors complain of meagre yields" offered by state-backed issuers in a low-interest-rate environment, making the Shanghai exchange's new framework a timely move, said the source. The 53 companies, including privately owned conglomerate Nanshan Group and electrical equipment maker TBEA Co offered coupon rates averaging just shy of 3 per cent, and as much as 4 per cent, for their bonds under the new framework, said the sources. That compares with financing costs of around 2 per cent for big, state-owned issuers. Details of the new framework have not previously been reported. The Shanghai Stock Exchange did not respond to Reuters' request for comment. Default risks The Shanghai bourse arranges frequent virtual and physical roadshows for securities firms, hedge fund houses and wealth managers to better understand the businesses and financial health of the issuers under the initiative, the sources said. The bourse also pushes brokerages to buy the bonds they underwrite and trade the securities in the secondary market to create demand and whet investor appetite for these issuances, they added. Despite the allure of higher returns, some investors remain cautious given the uncertain outlook for private businesses amid sluggish consumer demand in the world's second-largest economy. Huang Xuefeng, credit research director at Shanghai Anfang Private Fund Co, said his company had bid for some bonds under the new framework, but most of the issuers were not very appealing. "The coupon rates are not super attractive, especially when the issuer is a private company," Huang said. "One would prefer bonds sold by local government financial vehicles, which have few default risks." Huang said coupon rates higher than five per cent by private firms would be enticing, but such pricing could betray financial weakness, potentially discouraging investment by risk-averse institutions. Private companies accounted for 64 per cent of China's bond defaults by value between 2014 and August 2023, according to Shenwan Hongyuan. Investors in China typically do not flock to low-rated, high-yield bonds, unlike in the US, where the junk bond market is a key segment and has played a pivotal role in financing tech innovations and leveraged buyouts.
Business Recorder
24-07-2025
- Business
- Business Recorder
Privatisation of SOEs: PC to be given full legal autonomy: PM
ISLAMABAD: In a bid to accelerate the privatisation of loss-making state-owned enterprises (SOEs), Prime Minister Shahbaz Sharif pledged on Wednesday that the Privatization Commission would be granted full legal autonomy in an effort to eliminate bureaucratic red tape and extraneous interference in the country's privatisation process. The prime minister, while chairing a review meeting on progress of privatisation of SOEs, emphasised that reviving the country's ailing economy depends on the timely and transparent divestment of underperforming public sector entities. He described privatisation as a top priority for his administration, saying it must be handled 'effectively, comprehensively and efficiently.' SOE Act and MoF reporting: CCoSOEs grants SPD entities full exemptions 'Illegal occupation of valuable lands of national institutions is unacceptable under any circumstances,' he said, while urging caution in the disposal of such land. 'Every possible precaution should be taken.' The meeting focused on reviewing the progress of institutions slated for privatisation in 2024, including high-profile entities such as Pakistan International Airlines (PIA) and several power transmission companies, commonly referred to as Discos. PM Sharif directed that the Commission's efforts align with market conditions and adhere strictly to legal and transparency requirements. 'All decisions should be implemented fully and effectively,' he said. 'I will regularly monitor the progress of the ongoing work in the Privatization Commission.' The Privatization Commission officials briefed the prime minister on a phased strategy for privatising state enterprises, structured around legal, financial, and sector-specific factors. They noted that the plan, approved by the federal cabinet, is designed to meet both economic and institutional benchmarks within a fixed timeframe. The prime minister also underscored the importance of consulting professional experts and maintaining international standards throughout the privatisation and restructuring process. The push to privatise loss-making enterprises comes amid mounting fiscal pressures, with the government seeking to reduce its financial burden and attract private investment into sectors long plagued by inefficiencies and mismanagement. The meeting was attended by federal ministers Awais Leghari and Ahad Cheema, Chairman of the Privatization Commission Muhammad Ali, along with senior government officials and advisers. Copyright Business Recorder, 2025
Express Tribune
24-07-2025
- Business
- Express Tribune
PM reiterates talk offer to India
Prime Minister Shehbaz Sharif on Wednesday said Pakistan was ready for a meaningful dialogue with India on all outstanding issues. The prime minister stated this during his meeting with British High Commissioner to Pakistan Jane Marriott, the PM Office Media Wing said in a press release. The prime minister expressed his appreciation for the UK's role in de-escalation of tensions during the Pakistan-India stand-off. He welcomed the UK government's recent decision to resume PIA flights to and from the UK, which he said, would go a long way in alleviating the hardships faced by the British Pakistani community as well as enhancing people-to-people exchanges. He particularly appreciated the role of the high commissioner in this regard. The regional situation in South Asia and the Middle East was also discussed. The UK high commissioner thanked the prime minister for receiving her and briefed him about her recent visit to London, where she had extensive consultations on enhancing Pakistan-UK bilateral ties. She lauded the government's economic performance in the last year and a half, under the vision and leadership of the prime minister, which had brought about a significant improvement in all key macro-economic indicators. She also shared with the prime minister, the UK's perspective on regional developments in South Asia and the Middle East. Privatization Commission Prime Minister Shahbaz Sharif on Wednesday directed the authorities to ensure that the Privatization Commission would be given full autonomy as per the law to eliminate red tape and unnecessary elements during the denationalisation process of the state-owned enterprises (SOEs). The prime minister chaired a review meeting on the progress of privatization of SOEs here at the Prime Minister's Office, a PM Office news release said.
IOL News
18-07-2025
- Business
- IOL News
Mashatile calls for increased Chinese investment as trade deficit with China surges
Deputy President Shipokosa Paulus Mashatile delivers a keynote address at the South Africa-China Investment Forum, as part of his working visit to the People's Republic of China. Banele Ginidza Deputy President Paul Mashatile has issued a compelling invitation to Chinese corporations, advocating for increased investment in South Africa. Speaking at the South Africa-China Investment Forum in Beijing on Thursday, Mashatile highlighted a significant shift in the trade dynamics between the two nations, revealing that the trade deficit with China has escalated dramatically from less than $1 billion in the period between 1988 and 2000 to an alarming $9.71bn by 2023. Mashatile said ddressing these challenges necessitated expanding South Africa's export portfolio, encouraging value-added exports, and establishing a more balanced trade relationship. "We need to develop a more coordinated and strategic approach. We need to address challenges such as access to the Chinese market due to factors like tariff and non-tariff barriers, distance, and competition from other countries," Mashatile said. The essence of this trade imbalance, as Mashatile pointed out, stems from the current nature of the economic relationship where South Africa primarily exports raw materials and minerals while predominantly importing manufactured and capital goods from China. This disparity has raised concerns regarding the sustainability of such a model, particularly as both South Africa and China navigate increasing tariff barriers imposed by the United States. "As South Africa-China relations continue to deepen, new opportunities emerge for Chinese businesses seeking to enter the South African market, particularly in sectors such as renewable energy, green hydrogen, energy storage, infrastructure and logistics, our Special Economic Zones (SEZs), pharmaceuticals and medical devices, and the beneficiation of critical minerals, as well as in the digital economy," he said. Mashatile said South Africa sought to attract investments to increase greenfield investments, infrastructure investments, unlock funding or financial support, partnerships with SOEs, technology transfer and innovation partnerships, investments in SEZs and industrial parks, black industrialist partnerships, as well as capacity and technical assistance for SEZs. "Our SEZs offer an internationally competitive value proposition for the country with an attractive suite of incentives," Mashatile said. "They are located across the country, and each SEZ has unique offerings for investors, some of which could include tax relief, reduced corporate rate taxes and reduced costs for key inputs such as land, water and electricity." Mashatile highlighted the infrastructure investment plan as being in place to drive a range of projects in energy, water and sanitation, transport, digital infrastructure, human settlements, and agriculture and agro-processing. "The plan is supported by an Infrastructure Fund, offering investment opportunities in water development and irrigation projects across nine provinces, a road network expansion, a rehabilitation and maintenance program for construction companies, and high-demand spectrum," he said. Mashatile said South Africa's mineral exports, agricultural commodities, and manufactured items have achieved significant penetration in the Chinese market, aided by a steady flow of investment from Chinese companies since the announcement of President Cyril Ramaphosa's investment mobilisation drive. He said some of the existing partnerships included a major significant investment by the Industrial and Commercial Bank of China (ICBC), which purchased a 20% stake in the assets and earnings of Standard Bank for $5.5bn. Another major Chinese electronics manufacturer, Hi-Sense, entered the South African market in 1997. In 2013, the company established an industrial park. Mashatile cited other Chinese flagship companies such as Zhong Xing Communications (ZTE) and Huawei Technologies that were also expanding their presence in South Africa. "Over the last decade, 48 Chinese companies invested in South Africa with a capital investment of over $11.69bn," he said. BUSINESS REPORT
Barnama
16-07-2025
- Business
- Barnama
Top News Headlines In Indonesia, Laos, Myanmar, Singapore, & Thailand: July 16, 2025
The appointment of dozens of deputy ministers as state-owned enterprises' (SOEs) commissioners has raised renewed questions over conflicts of interest and the potential impact on the government's overall performance, amid the lack of any mechanism to evaluate poorly performing cabinet members. US President Donald Trump announced Tuesday that he had reached a deal with Indonesia as Jakarta tried to get Washington to drop its looming tariffs. Trump broke the news on the social media platform Truth Social by announcing that it would be a win for both sides. 1. LANCANG-MEKONG TO FINANCE LAO PROJECTS -- VIENTIANE TIMES Laos has secured about RM12 million (US$2.8 million) from the China-funded Lancang-Mekong Cooperation for 10 development projects. The funding will cover agriculture, human resources, public health, water resources and poverty eradication projects. 2. INCENTIVES FOR JAPANESE INVESTORS -- VIENTIANE TIMES Lao will offer several investment incentives to Japanese investors. It has announced exemptions on import duties for raw materials and construction equipment used in production, cheaper electricity, and water supply. MYANMAR 1. APRIL-JUNE HONEY OUTPUT TOUCHES 480 METRIC TONNES -- THE GLOBAL NEW LIGHT OF MYANMAR Myanmar exported over 480 metric tonnes of honey valued at RM3 million (US$720,000) between April and June this year. Myanmar produces about 4,000 metric tonnes of honey annually and 60 per cent is exported. THREATS TO FAMILIES IN MAGWAY - - THE GLOBAL NEW LIGHT OF MYANMAR Families living in Magway Region are being evacuated as the water level of the Ayeyarwady River has been rising due to rain. Authorities fear the water level could reach a dangerous level in the coming days. SINGAPORE TARIFFS MAY LAST WELL AFTER TRUMP; CRUCIAL FOR COUNTRIES TO DEEPEN TRADE TIES: SM LEE -- THE STRAITS TIMES Countries that support free trade should strengthen cooperation and work together to adapt to evolving global trade dynamics in response to the United States' increasingly protectionist stance. OF TARIFFS NOT TEMPORARY, WORLD WILL NOT GO BACK TO STATUS QUO: SM LEE -- CNA The world will not go back to 'status quo', or what it was like before US President Donald Trump rolled out tariffs, said Senior Minister Lee Hsien Loong on Tuesday (Jul 15). THAILAND 1. THAILAND BRACES FOR HEAVY RAIN AND ROUGH SEAS AS STRONG MONSOON INTENSIFIES -- THE NATION A low-pressure cell and strong southwest monsoon bring heavy rain and 3-metre waves to parts of Thailand. Small boats advised to stay ashore. 2. MONKS' TITLES RESCINDED, 'GOLF' CUFFED -- BANGKOK POST His Majesty the King has issued a royal command to revoke the royal appointments and ecclesiastical titles previously conferred upon a total of 81 monks, in light of recent reports of monastic misconduct that have deeply affected public sentiment. VIETNAM FISHING IN CA MAU -- VIETNAMPLUS The Ca Mau province is eliminating illegal, unreported and unregulated fishing to help remove the European Commission's 'yellow card' warning on Vietnam's seafood exports. Sustainable practices are being promoted to about 2,000 fishing vessel owners in the area. RULES ON DAIRY PRODUCTS IMPACT EXPORTERS -- VIETNAM NEWS Only sterilised milk made from fresh raw milk can be exported to China starting September 16. Vietnamese exporters can only use fresh cow or goat milk as raw material for sterilised milk production, including ultra-high temperature and pasteurised milk. -- BERNAMA BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; BERNAMA TV on Astro 502, unifi TV 631 and MYTV 121 channels and BERNAMA Radio on FM93.9 (Klang Valley), FM107.5 (Johor Bahru), FM107.9 (Kota Kinabalu) and FM100.9 (Kuching) frequencies. Follow us on social media : Facebook : @bernamaofficial, @bernamatv, @bernamaradio Twitter : @ @BernamaTV, @bernamaradio Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial TikTok : @bernamaofficial
