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Tonic for brokers lifts index
By Verain Ye |
February 28, 2013, Thursday
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Print Edition
Print Edition
SHANGHAI stocks rallied from a one-month low yesterday as brokerages gained after China's securities regulator said it will allow them to trade asset-backed securities.
The Shanghai Composite Index rose 0.87 percent to close at 2,313.22 points.
Brokerages will be allowed to trade a wide range of asset-backed securities, including receivables, credit assets, commercial paper, stocks, bonds, and commercial properties, as the threshold for them to do so will be eased, according to the China Securities Regulatory Commission.
The securitization of illiquid assets will produce stable cash flow for the brokerages, the CSRC said.
China Merchants Securities Co said the asset-backed securities business may generate 7.8 billion yuan (US$1.25 billion) in earnings for the brokerages, accounting for 6 percent of their total income.
Investor concern over a possible harsher monetary stance were also allayed by a China Securities Journal report that the People's Bank of China may today possibly inject liquidity into the money market via reverse repurchase agreements.
Northeast Securities Co said the PBOC is unlikely to tighten its monetary stance in the short term because the economic recovery is still at an initial phase, new projects need cash and consumer prices remain relatively low.
CITIC Securities, the country's biggest listed brokerage, gained 3 percent to 13.95 yuan. Founder Securities Co rose 5.5 percent to 6.15 yuan.
The Shanghai Composite Index rose 0.87 percent to close at 2,313.22 points.
Brokerages will be allowed to trade a wide range of asset-backed securities, including receivables, credit assets, commercial paper, stocks, bonds, and commercial properties, as the threshold for them to do so will be eased, according to the China Securities Regulatory Commission.
The securitization of illiquid assets will produce stable cash flow for the brokerages, the CSRC said.
China Merchants Securities Co said the asset-backed securities business may generate 7.8 billion yuan (US$1.25 billion) in earnings for the brokerages, accounting for 6 percent of their total income.
Investor concern over a possible harsher monetary stance were also allayed by a China Securities Journal report that the People's Bank of China may today possibly inject liquidity into the money market via reverse repurchase agreements.
Northeast Securities Co said the PBOC is unlikely to tighten its monetary stance in the short term because the economic recovery is still at an initial phase, new projects need cash and consumer prices remain relatively low.
CITIC Securities, the country's biggest listed brokerage, gained 3 percent to 13.95 yuan. Founder Securities Co rose 5.5 percent to 6.15 yuan.
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