Beijing orders brokerages to lift fundraising quota, eases liquidity for smaller financial firms
- Shenzhen-based GF Securities and China Merchant Securities receive orders to improve quota for commercial bill issuance
- Beijing is working on boosting confidence by easing credit after Baoshang Bank takeover, analysts say
Shenzhen-based brokerages GF Securities and China Merchants Securities said on Monday they had been asked to lift their quotas on short-term fundraising by Beijing, a move that may boost lending to smaller financial firms.
“The company has received a notice from the People’s Bank of China [PBOC] to improve the upper limit to 17.6 billion yuan [US$2.6 billion] for outstanding commercial bill issuance,” GF Securities said in a filing to the Shenzhen Stock Exchange on Monday morning.
Commercial bills are a key form of short-term fundraising in the interbank market. The quota at GF Securities was earlier set at 12.4 billion yuan, according to previous filings.
China Merchants Securities said its cap on outstanding bill issuances had been revised to 31.6 billion yuan from 7 billion yuan, set last year.
Beijing is working to ease interbank liquidity tightness after the takeover of Baoshang Bank, an Inner Mongolia-based mid-sized commercial bank, last month.
“This is another action by the PBOC to ease the liquidity pressure of small and medium sized financial institutions,” said David Yin, analyst with rating agency Moody’s.