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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (26941)	4/5/2005 6:03:05 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Beijing to lift corporate bond ceiling Tim LeeMaster April 6, 2005 The mainland's ceiling on corporate bond sales will climb to just under 50 billion yuan (HK$47.14 billion) this year, its highest level since Beijing shuttered the nascent debt capital markets after a series of scandals in the late 1990s, industry sources quoted by Reuters said. The move comes as mainland authorities search for ways to recapitalize ailing state-owned companies amid a stock market meltdown and tough bank lending restrictions. The increase is a boon for retail and institutional investors in a country where bank deposits garner next to nothing and share prices are trading near six-year lows. It is unclear how many companies will take advantage of the increase, given concerns that the central bank may soon raise interest rates in an attempt to stem inflation. Consumer prices rose 3.9 percent on an annualized basis in February, ahead of analysts' forecasts. The People's Bank of China boosted rates by 27 basis points, the first increase in almost nine years, in October putting a chill on debt sales as would-be investors backed off fearing a decline in bond prices. The bank's benchmark interest rate is now 5.58 percent. Even so, capital-hungry companies may forge ahead because their options are so limited. Selling shares in China's depressed equity markets is unattractive. The Shanghai Composite Index fell 16.5 percent last year and 3.2 percent so far this year, making it the world's worst performing index. thestandard.com.hk