BIZCHINA / News
CSRC will approve corporate bond issuance
By Zi Ben (China Daily)
Updated: 2007-06-14 08:25
The China Securities Regulatory Commission (CSRC) will be able to approve
the issuance of bonds with durations above one year by Chinese listed
companies, according to a draft rule published by the CSRC.
According to the rule, companies listed overseas as well as on the
Shanghai and Shenzhen exchanges will be able to issue such bonds.
The CSRC posted the draft rule on its official website to solicit
opinions about the long-awaited reform.
The CSRC has been studying a new efficient mechanism of issuing corporate
bonds to develop the largely neglected market since December. The move is
aimed at bolstering the undeveloped bourse-based bond market as soon as
possible.
Corporate bond issuance at present is approved by the National
Development and Reform Commission, which sets quotas each year. The
central bank sets the limits on the coupons of the debt. The bond also
has to get the approval for listing from the CSRC and the bourse.
The approval process usually takes a year to 18 months to complete.
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Shang Fulin, chairman of the CSRC said in January that the development of
the corporate bond market would be the commission's priority in 2007.
The draft rule said companies with net assets of 1 billion to 1.5 billion
yuan or more would be able to issue bonds without bank guarantees under
the new rules. The total number bonds a company - excluding financial
firms - can issue should be no more than 40 percent of its net asset, it
said.
The regulator's determination to boost the bond market, however, did not
affect the stock market's performance yesterday.
The Shanghai Composite Index ended the day up 2.56 percent to 4,176.479
points, after climbing as much as 2.98 percent at one point.
It was the seventh consecutive daily rise, bringing the index within 4
percentage points of an all-time high hit on May 29, just before
authorities raised the stock trading tax to cool speculation.
The regulator had approved the launch of new mutual funds to cool the
robust rebound, but upward momentum was too strong to be stopped.
Authorities might try again to cool the market, but it could prove more
difficult this time since stocks rebounded after the last tumble,
analysts said.
(For more biz stories, please visit Industry Updates)
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