With China's increased efforts to resolve local debt risks, the number of bond issuance of Chinese local government financing platform (LGFV) increased in August.
Bloomberg News reported on Wednesday (September 20) that the data compiled by Bloomberg showed that the amount of bonds on the shore local financing platform in August was about 620 billion yuan (RMB, the same below, about S $ 115.9 billion), An increase of nearly 50%compared to July, the third highest monthly distribution since the record.
Local government financing platforms are usually responsible for building infrastructure projects.It is reported that most of the provinces that promote the increase in circulation come from provinces with weak fiscal conditions. For example, the total amount of local financing platform bonds issued by Heilongjiang in August was eight times that of July, and the average ticket interest rate decreased by 2.27 percentage points from the previous month.
Tianjin City Investment Group also issued a bill of 1.5 billion yuan in August and expired in February 2024. The total number of attracted bids exceeded 70 times the issuance scale.
It is reported that the increase in the increase in the circulation of local financing bonds shows that after the Chinese Ministry of Finance has issued about 1 trillion yuan of local governments' re -financing bonds, and helping local repayment of hidden debt, investors began to believe in local financingThe debt will be relatively safe in the short term or at least.
Nevertheless, most of the issued bonds are short -term bonds, indicating that investors are concerned about the long -term prospects of the Chinese real estate industry.
According to Bloomberg, in the first half of 2023, the average period of time (that is, the length before the debt expires) of the local financing bonds of the shore was 2.51 years, which was a decline in 2.95 years in 2022.It is also the shortest time since the record in 1999.
