Issue 372 in total
The disclosure of the first regulatory fine in the trust industry in the Year of the Dragon sends a signal of continuous strict supervision
On February 18, the first working day of the Year of the Dragon, the State Administration of Financial Supervision and Administration issued an administrative penalty information disclosure form and imposed a fine of 1 million yuan on Yingda Trust. According to public information, Yingda Trust failed to perform prudent and diligent business, reviewed the authenticity of accounts receivable and failed to monitor funds, and the Beijing Supervision Bureau of the State Financial Supervision and Administration fined Yingda Trust a total of 1 million yuan in accordance with Articles 21, 46 and 48 of the Banking Supervision and Administration Law of the People's Republic of China and relevant prudent business rules. At the same time, Liu Jinzhou, then general manager of the third department of Yingda Trust's trust business; Wang Tao, the head of the Beijing business team and the assetization team, were respectively given warnings. Industry insiders said that the punishment of Yingda Trust this time, from the perspective of the main violations of laws and regulations, reflects the fact that the trust company has not performed its duties and responsibilities in the process of business development, and it also shows that the situation of strict supervision has not been relaxed. Under the new three classifications of trust business, trust companies need to pay close attention to the compliance of the business itself and the post-project management in addition to paying attention to the internal control system and business operation process compliance, and strengthening risk management and legal compliance will become the demands of more and more trust companies. （*
Beware of interest rate risk The Hong Kong Monetary Authority (HKMA) speaks
In the early morning of February 1, Beijing time, the Federal Open Market Committee (FOMC) of the Federal Reserve announced that it would maintain the target range of the federal ** interest rate at 525% to 550% unchanged, in line with market expectations. It is reported that the decision to pause the interest rate hike was not only unanimously approved by the voting members of the FOMC, but also in line with market expectations. As the Hong Kong dollar implements a linked exchange rate system, the Hong Kong Monetary Authority also issued a response as soon as possible, saying that the Fed's future interest rate decision will depend on economic data, outlook and risks in all aspects, and there is still uncertainty about when the Fed will start cutting interest rates and the trend of interest rates in the future, and the high interest rate environment may remain for a period of time. "Hong Kong's financial and money markets continue to operate smoothly, the Hong Kong dollar exchange rate remains stable, and the Hong Kong dollar interbank rate is likely to remain at a high level for some time to come. "The Hong Kong Monetary Authority reminds investors to carefully consider and manage interest rate risk when making home, mortgage or other borrowing decisions. (Brokerage China).
The debt crisis in South China City continues to ferment
A few days ago, some creditors of China South City Holdings*** (hereinafter referred to as "China South City") issued an open letter against China South City and the company's major shareholder, Shenzhen Special Zone Construction and Development Group*** (hereinafter referred to as "Special Zone C&D"), regarding the debt default of China South City. The letter was addressed by the "Boycott of South China City Malicious Debt Evasion Concern Group". The open letter refers to the "default" announcement issued by China South City on February 9, "due to the increasing liquidity constraints, it is expected that no payment will be made on the mandatory redemption proceeds of the October 2024 Notes due on February 9, 2024, which will lead to an event of default on the October 2024 Notes; No interest is expected to be paid on the April 2024 Notes due on February 12, 2024, and failure to pay such interest by March 13, 2024 will result in an Event of Default on the April 2024 Notes. According to the announcements issued by the Special Administrative Region C&D on February 19 and February 20, after its verification, the compulsory redemption money due on February 9 and the interest due on February 12 have not been paid. (Blue Whale Finance).
Illegal use of bonds to raise funds Chenzhou Industrial Investment Group received a warning letter
The Hunan Securities Regulatory Bureau announced on the 20th that Chenzhou Industrial Investment Group took administrative supervision measures of issuing a warning letter to it due to the violation of using bonds to raise funds in accordance with regulations and agreements. It is reported that in August 2022, Chenzhou Industrial Investment Group did not use the "22 Chentou 01" to raise funds according to the agreed purpose486.4 billion yuan was used to subscribe for private placement **investment**, and the amount involved accounted for 20% of the total funds raised by the existing corporate bonds at that time300 million of 2396%。In December 2022, the Group returned the aforesaid raised funds to the special account for raising funds. In July 2023, Chenzhou Industrial Investment Group did not use the "23 Chentou 02" to raise funds according to the agreed purpose2364.8 billion yuan is used to repay the company's interest-bearing debts and supplement working capital other than those agreed in the prospectus, and the amount involved accounts for 377.7 billion yuan of 626%。In August 2023, the Group returned the aforesaid raised funds to the special account for raising funds. The Hunan Securities Regulatory Bureau pointed out that the above behavior violated the provisions of Article 13 of the Administrative Measures for the Issuance and Trading of Corporate Bonds. Considering that Chenzhou Industrial Investment Group took the initiative to correct and did not cause major harmful consequences, in accordance with Article 69 of the Administrative Measures for the Issuance and Trading of Corporate Bonds, it was decided to take administrative supervision measures against Chenzhou Industrial Investment Group by issuing a warning letter. (Xinhua Finance).
Global debt hits a new high of $313 trillion in 2023 Emerging markets are under greater pressure to service their debts
On February 21, the Institute of International Finance (IFF) released the "Global Debt Monitor" report, saying that in 2023, global debt will surge by more than 15 trillion US dollars, hitting a record high of 313 trillion US dollars, and 55% of the increase will come from developed economies in Europe and the United States. According to the report, the total debt of developed countries will rise to 208 in 2023$3 trillion, and the total debt of developing countries rose to 1046 trillion dollars. By sector, household debt reached 59$3 trillion and public sector debt of $89$9 trillion, with a debt of 94 for non-financial companies4 trillion dollars, financial institutions debt of 69$4 trillion. Despite the record size of debt, the global debt-to-GDP ratio fell to 330% in 2023, declining for the third consecutive year. IFF noted that the debt-to-GDP ratio in developed countries has fallen significantly, but debt ratios continue to climb in some emerging market countries, including India, Argentina, China, Russia, Malaysia and South Africa, which are facing increasing debt service pressures. With Fed rate cut expectations looming, uncertainty around the direction of the U.S. policy rate and the U.S. dollar could further exacerbate market volatility and create tighter financing conditions for countries that are highly dependent on external borrowing, IFF said. At the same time, underlying inflationary pressures could lead to higher borrowing costs. (Interface News).
Editor-in-charge of this issue: Yin Zhentao, Li Zhi.
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