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Shares fall as China tightens rules on wealth products
By Ye Zhen |
March 28, 2013, Thursday
|
Print Edition
Print Edition
SHANGHAI stocks were down this morning when financial stocks tumbled after China's banking regulator tightened controls on wealth management products.
The benchmark Shanghai Composite Index slumped 2.6 percent to 2,240.60 points by midday, with a turnover of 65.4 billion yuan (US$10.5 billion).
Chinese commercial banks should disclose to customers all information related to wealth management products, including the borrower, maturity, return ratio and transaction structure, the China Banking Regulatory Commission said in a statement.
The banking watchdog also requires that no more than 35 percent of a bank's total issued wealth-management products or no more than 4 percent of its total assets should be invested in debts or used to make loans.
The new move targets squarely at the country's shadow-banking system in an effort to control the risks of the financial system, but it may erode banks' profitability, market watchers said.
Industrial Bank Co plunged 9.8 percent to 17.90 yuan. China Minsheng Banking Corp skid 8.6 percent to 9.64 yuan. Shanghai Pudong Development Bank Co fell 7.2 percent to 9.99 yuan.
Brokerages also declined. CITIC Securities, China's biggest listed brokerage, lost 3.8 percent to 12.28 yuan. Haitong Securities Co dropped 5.6 percent to 10.25 yuan. Founder Securities Co shed 3.6 percent to 7.51 yuan.
China Life Insurance, the country's biggest insurer, fell 1.7 percent to 17.07 yuan after reporting a 40 percent decrease in net profit for 2012. Ping An Insurance Co, China's second largest insurer, lost 2.7 percent to 41 yuan. China Pacific Insurance (Group) Co retreated 2.6 percent to 18.20 yuan.
The benchmark Shanghai Composite Index slumped 2.6 percent to 2,240.60 points by midday, with a turnover of 65.4 billion yuan (US$10.5 billion).
Chinese commercial banks should disclose to customers all information related to wealth management products, including the borrower, maturity, return ratio and transaction structure, the China Banking Regulatory Commission said in a statement.
The banking watchdog also requires that no more than 35 percent of a bank's total issued wealth-management products or no more than 4 percent of its total assets should be invested in debts or used to make loans.
The new move targets squarely at the country's shadow-banking system in an effort to control the risks of the financial system, but it may erode banks' profitability, market watchers said.
Industrial Bank Co plunged 9.8 percent to 17.90 yuan. China Minsheng Banking Corp skid 8.6 percent to 9.64 yuan. Shanghai Pudong Development Bank Co fell 7.2 percent to 9.99 yuan.
Brokerages also declined. CITIC Securities, China's biggest listed brokerage, lost 3.8 percent to 12.28 yuan. Haitong Securities Co dropped 5.6 percent to 10.25 yuan. Founder Securities Co shed 3.6 percent to 7.51 yuan.
China Life Insurance, the country's biggest insurer, fell 1.7 percent to 17.07 yuan after reporting a 40 percent decrease in net profit for 2012. Ping An Insurance Co, China's second largest insurer, lost 2.7 percent to 41 yuan. China Pacific Insurance (Group) Co retreated 2.6 percent to 18.20 yuan.
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