Index sheds nearly 3% on CBRC rule
By Ye Zhen |
March 29, 2013, Friday
|
Print Edition
Print Edition
SHANGHAI stocks yesterday shed nearly 3 percent, the most in over three weeks, as financial counters fell after China's banking regulator tightened oversight on wealth management products.
The Shanghai Composite Index plunged 2.8 percent, the biggest daily loss since March 4, to 2,236.30 points.
Market sentiment was hit after the China Banking Regulatory Commission required Chinese banks to tell customers all information related to wealth management products, including the borrower, maturity, return ratio and transaction structure, and inform them of any changes in five days.
The CBRC also requires that off-balance sheet products sold to customers should be no more than 35 percent of a bank's total issued wealth-management products or no more than 4 percent of its total assets, whichever is the lower, it said in a statement on its website.
"The requirement will increase banks' costs in managing and accounting these assets and is expected to reduce the gross earnings of the banking industry by 1.3 percent in 2013," a Guotai Junan Securities report said.
The Industrial Bank Co plunged by the daily limit of 10 percent to 17.87 yuan. China Minsheng Banking Corp lost 8.8 percent to 9.62 yuan and Shanghai Pudong Development Bank Co fell 6.9 percent to 10.02 yuan.
CITIC Securities, China's biggest listed broker, lost 3.9 percent to 12.27 yuan after net profit plunged 66 percent last year.
The Shanghai Composite Index plunged 2.8 percent, the biggest daily loss since March 4, to 2,236.30 points.
Market sentiment was hit after the China Banking Regulatory Commission required Chinese banks to tell customers all information related to wealth management products, including the borrower, maturity, return ratio and transaction structure, and inform them of any changes in five days.
The CBRC also requires that off-balance sheet products sold to customers should be no more than 35 percent of a bank's total issued wealth-management products or no more than 4 percent of its total assets, whichever is the lower, it said in a statement on its website.
"The requirement will increase banks' costs in managing and accounting these assets and is expected to reduce the gross earnings of the banking industry by 1.3 percent in 2013," a Guotai Junan Securities report said.
The Industrial Bank Co plunged by the daily limit of 10 percent to 17.87 yuan. China Minsheng Banking Corp lost 8.8 percent to 9.62 yuan and Shanghai Pudong Development Bank Co fell 6.9 percent to 10.02 yuan.
CITIC Securities, China's biggest listed broker, lost 3.9 percent to 12.27 yuan after net profit plunged 66 percent last year.
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