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1216 - Zhongyuan Bank Co News Story

HK$1.08 0.0  1.9%

Last Trade - 16/04/21

Mid Cap
Market Cap £2.02bn
Enterprise Value £10.13bn
Revenue £2.23bn
Position in Universe 576th / 6093

UPDATE 1-China to probe three banks in widening default inquiry

Thu 19th November, 2020 12:12pm
(Adds details, background)
    SHANGHAI, Nov 19 (Reuters) - China widened its probe into
last week's shock bond default by a state-owned coal miner,
saying on Thursday that three underwriting banks were suspected
of misbehavior.
    China's interbank bond market regulator said in a statement
it will launch investigations into Industrial Bank Co
 601166.SS , China Everbright Bank  601818.SS  and Zhongyuan
Bank Co  1216.HK , which helped Yongcheng Coal & Electricity
Holding Group issue bonds. 
    The National Association of Financial Market Institutional
Investors (NAFMII) said Xigema Certified Public Accountants and
China Chengxin International Credit Rating Co are also suspected
of violating rules.
    Yongcheng defaulted on a 1 billion yuan ($151.84 million)
bond on Nov. 10, just weeks after it sold fresh debt, sparking a
selloff in China's corporate debt market.
    The market jitters heighten funding costs for many corporate
borrowers, threatening China's nascent economic recovery.
    The fresh probe comes a day after NAFMMI threatened to
sanction Haitong securities  600837.SS , saying the brokerage
was suspected of facilitating illegal issuance of bonds by
Yongcheng Coal, and of manipulating the market.  urn:newsml:reuters.com:*:nL1N2I40O5 
    NAFMII, a self-regulatory body under the People's Bank of
China, announced a "self-disciplinary" investigation into
Yongcheng on Nov. 12, immediately after its default.
    The companies named by NAFMII could not be immediately
reached for comment.
    Several high-profile defaults recently by Chinese state
firms, including Huachen Auto Group Holdings Co and Tsinghua
Unigroup, sent shockwaves across China's corporate bond market.
    Investors rushed to sell bonds issued by companies in
provinces seen as fiscally weak, such as Liaoning, Shanxi and
    Seeking to soothe investor nerves, the deputy governor of
Shanxi said on Wednesday state firms from the province would be
able to meet repayment obligations on bonds which mature in the
near term, pleading support from financial institutions.
    ($1 = 6.5859 Chinese yuan renminbi)

 (Reporting by Samuel Shen and Andrew Galbraith; Editing by Toby
Chopra and Bernadette Baum)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))
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