PB C TO FO­CUS ON NON-BANK LENDERS

In­sti­tu­tions such as trust and in­vest­ment firms have con­sid­er­able im­pact, says cen­tral bank

New Straits Times - - Business - PEO­PLE’S BANK OF CHINA’S WORK­ING PA­PER

BEI­JING merge with China Na­tional Nu­clear Corp, the sec­ond-big­gest nu­clear power op­er­a­tor in China. The com­bined firm would have 297 gi­gawatts (GW) of ca­pac­ity and 2.04 tril­lion yuan in as­sets, ac­cord­ing to data pub­lished on com­pany and reg­u­la­tor web­sites, as well as an­nual re­ports.

China Datang Corp, one of the five big­gest coal-fired gen­er­a­tors, may merge with China Gen­eral Nu­clear Power Corp, the largest nu­clear power op­er­a­tor, a less reg­u­lated form of lend­ing — even as pol­i­cy­mak­ers have tried to rein in lever­age in the Chi­nese econ­omy.

“Though banks still dom­i­nate China’s fi­nan­cial sys­tem, non-bank fi­nan­cial in­sti­tu­tions have con­sid­er­able in­flu­ence as well,” said the pa­per pub­lished on the Peo­ple’s Bank of China web­site.

“We be­lieve that suf­fi­cient at­ten­tion should be given to in­ter­na­tional spillover ef­fects of in­ter­ven­tion poli­cies, and the im­pact of non­bank fi­nan­cial in­sti­tu­tions to fi­nan­cial sta­bil­ity,” it said.

The pa­per an­a­lysed the im­pact of changes in China’s stock mar­ket and Shen­hua Group Corp, the coun­try’s big­gest coal miner, as well as a ma­jor rail op­er­a­tor and power pro­ducer. The com­bined en­tity would have 241GW of ca­pac­ity and 2.09 tril­lion yuan in as­sets.

China Hua­neng, the coun­try’s big­gest coal-fired power pro­ducer, may merge with State Power In­vest­ment Corp, a coal-fired power firm that also owns State Nu­clear Power Tech­nol­ogy Corp, the unit build­ing the coun­try’s and fi­nan­cial sec­tor on de­vel­oped coun­tries — the United States, Bri­tain, Ger­many and Ja­pan.

“China’s fi­nan­cial sec­tor ex­erts con­sid­er­able in­flu­ence on global fi­nan­cial mar­kets, es­pe­cially on the Ja­panese fi­nan­cial sec­tor,” it said.

The cen­tral bank has gin­gerly raised short-term rates re­cently to con­tain fi­nan­cial risks and en­cour­age com­pa­nies to delever­age, though economists ex­pect au­thor­i­ties will move cau­tiously to avoid hurt­ing eco­nomic growth. Reuters

We be­lieve that suf­fi­cient at­ten­tion should be given to in­ter­na­tional spillover ef­fects of in­ter­ven­tion poli­cies, and the im­pact of non-bank fi­nan­cial in­sti­tu­tions to fi­nan­cial sta­bil­ity.

West­ing­house-de­signed AP1000 third-gen­er­a­tion nu­clear re­ac­tors. The com­bined en­tity would have about 262GW of ca­pac­ity and as­sets of 1.75 tril­lion yuan.

“These po­ten­tial merg­ers, if con­firmed, would be more pos­i­tive for and pos­si­bly lead to rerat­ings for the coal-fired IPPs, which are cur­rently hav­ing a dif­fi­cult time break­ing even,” said Daiwa Se­cu­ri­ties Group Inc an­a­lyst Den­nis Ip. Bloomberg

BLOOMBERG PIC

China Hua­neng is the coun­try’s big­gest coal-fired power pro­ducer.

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