FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » China allows first corporate bond default

China allows first corporate bond default

Go down  Message [Page 1 of 1]

1China allows first corporate bond default Empty China allows first corporate bond default Sat Mar 08, 2014 12:19 pm

Hanoifortune

Hanoifortune
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
BEIJING (AP) — Chinese authorities allowed the country's first corporate bond default on Friday, inflicting losses on small investors in a painful step toward making its financial system more market-oriented.

Investors in bonds sold in 2012 by Chaori Solar Energy Science & Technology Co., a manufacturer of solar panels, were paid as little as 3 percent of the interest that was due Friday, according to two bondholders, one of whom said he put his parents' savings into the bonds. The company warned earlier this week it had only 4 million yuan ($660,000) and faced an interest payment of 90 million yuan ($15 million).

Until now, Beijing has bailed out troubled borrowers to preserve confidence in its fledgling credit markets. But the ruling Communist Party has pledged to make the economy more productive by allowing market forces a bigger role.

Earlier efforts to stave off defaults by other borrowers with loans from state banks or other aid prompted complaints Chinese authorities were wasting money. Critics said investors should share in losses. The implicit government guarantee also meant bond interest rates didn't accurately reflect investment risks, a key function of bond markets.

The timing of the default was highly symbolic, coming two days after Premier Li Keqiang, in an annual policy speech to China's legislature, said markets would play a "decisive role" in allocating credit and other resources.

The ruling party usually tries to prevent politically sensitive developments during such high-profile events. Its willingness to allow Chaori's default to go ahead suggested Chinese leaders want to make clear such events are routine.

Financial analysts have expressed concern about rising Chinese corporate debt as rapid economic growth slows and the government tries to cool a lending and investment boom.

Some companies also face pressure due to government efforts to reduce production capacity in industries in which supply exceeds demand, such as steel, cement and aluminum. That glut of supply has depressed prices, sometimes below production cost, causing heavy losses and in some cases forcing companies into bankruptcy.

Phone calls to Chaori's headquarters on Friday were not answered. News reports earlier said many investors in the company's 1 billion yuan ($160 million) bond issue were retirees and other individual buyers.

Small investors who want a better return than the low interest rates paid by China's state-owned banks have flocked to corporate bonds and higher-risk investments such as securities backed by packages of credit card and other debt.

One investor in Chaori bonds, Wang Haorao, said he received a payment of just over 10,000 yuan ($1,600) on Friday, equal to about 4 percent of the 250,000 yuan ($42,000) in interest he received on the same date last year.

Wang, a researcher for a securities firm in the eastern city of Tianjin, said he invested more than 1 million yuan ($160,000) of his own money and 2.8 million yuan ($460,000) from friends and relatives in Chaori bonds.

"The stock market is unstable and the bank interest rate is just too low in China. That's why we invested in the bonds," said Wang, 33. "When I saw the announcement two days ago, I knew the worst was happening."

China's solar equipment industry has suffered heavy losses due to a glut of production capacity that led to price-cutting wars.

The manufacturing unit of China's biggest producer of solar equipment, Suntech Power Ltd., was forced into bankruptcy court protection last year after it missed a $541 million debt payment.

Another bondholder, a civil servant in the eastern city of Zibo who would give only his surname, An, said he invested 1 million yuan ($160,000). He said that on Friday he received 3,000 yuan ($500) of the 90,000 yuan ($15,000) he was owed.

"The money is from my parents. The complained about the low interest rate from banks," said An. "They had no idea about the whole situation until now."

On Thursday, an official of China's securities regulator, Ouyang Zehua, was quoted by state media as saying Chaori's looming default was a "typical market-oriented event."

Expecting companies to be bailed out "is plainly against the spirit of a maturing market economy, and simply unsustainable," said a commentary by the official Xinhua News Agency.

The Chaori default might make investors wary of bonds issued by other companies, said Zhang Qi, an analyst at Haitong Securities in Shanghai.

"It could be harder for other small companies to raise money," said Zhang. "Financing costs might be higher and they might need to pledge more collateral to raise the money."

___
http://news.yahoo.com/china-allows-first-corporate-bond-default-112228433.html

FLOWER2

FLOWER2
Manager - Equity Analytics
Manager - Equity Analytics
After seeing this other small companies could find harder to raise money.

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum