China
LATEST ARTICLES
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Asiamoney
British economist John Maynard Keynes famously wrote more than 80 years ago that people’s behaviour in the financial world is often driven by “animal spirits” that suggest “spontaneous optimism rather than mathematical expectations”. The current craze for special purpose acquisition company (Spac) listings is a good example. -
How should investors incorporate political risk into their view of asset markets?
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Since the People’s Bank of China (PBoC) reformed the country’s benchmark rate system in August 2019, many banks have linked their RMBS trades to the new five-year loan prime rate (LPR). But the underlying mortgages of their RMBS deals were still linked to the old benchmark rate. As a result, linking their RMBS to the new five-year LPR created a rate mismatch between the asset side and the securities side.
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The legal landscape in China around the securitization industry is often hard to navigate. But King & Wood Mallesons (KWM) stands out from its peers. The law firm provided legal services for 254 securitization transactions with a total value of Rmb296.2 billion ($45.4 billion) during the awards period, according to Wind data.
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China Chengxin International Credit Rating (CCXI) dominated ABS ratings during the awards period with a market share of more than 55%, well ahead of its closest competitor, which had a 27% share.
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Citic Securities has an enviable position in China’s ABS market: it boasts a structuring team with the ability to innovate and a large enough client base to test out those new ideas. The firm has notched up several landmark deals, each opening new ground for others to follow.
