Financial Services Talking Points | 11/01/2017

finance-tpIn today’s talking points: China’s 2016 growth estimated at 6.7%; Lender ANZ is offloading its NZ asset finance business to China’s HNA Group for $626 million;UnionPay network expands to include JD.com; Recent regulation changes allow foreign private funds to invest onshore.


China’s 2016 growth estimated at 6.7%

Xu Shaoshi, director of the National Development and Reform Commission, said China’s economic growth in 2016 is expected to be around 6.7 per cent. This would meet China’s target of 6.5-7 per cent economic growth in 2016. Activity was boosted by higher government spending, a housing rally and record high levels of bank lending, which, also led to an explosive increase in debt. In December China’s producer prices surged to highs not seen in more than five years as prices of coal and other raw materials soared. This reinforces views that China, the second-largest economy in the world, is showing signs of stabilisation, underpinned by stronger factory activity and domestic demand.

Read more at: Yahoo Finance

Lender ANZ is offloading its NZ asset finance business to China’s HNA Group for $626 million

ANZ has announced the sale of its New Zealand-focused asset finance business UDC Finance to Chinese logistics and financial services company HNA Group, for $626 million. The agreement is ANZ’s second asset sale in two weeks as it continues efforts to streamline the business and increase it capital. The sale, set to be completed late in 2017, will result in a net gain of A$100 million. “The sale of UDC is consistent with our strategy to simplify the bank,” ANZ’s New Zealand chief executive David Hisco said. ANZ also announced the sale of its retail banking and wealth management business in five Asian countries to DBS Bank Singapore in October last year. ANZ continues to cut assets that are not providing high returns, as part of its strategy to wind back previous chief executive Mike Smith’s program to expand into Asia.

Read more at: SBS News

UnionPay network expands to include JD.com

One week ago, the online payment unit of JD.com became a member of China UnionPay, thereby extending the bank-card operator’s network to all major third-party payment platforms in China with the notable exception of Alipay, which was launched by Alibaba Group Holding Ltd. in 2004 and accounts for more than 50% of China’s online payments market. According to recent strategic agreement signed by UnionPay and JD.com, Chinabank Payments Technology Co. Ltd. will be able to accept both online and offline transactions made with a bank card operated by UnionPay. This agreement also allows UnionPay and JD Finance to develop new payment products, expand financial services in rural areas, and explore cooperation opportunities in big data and overseas business that tap into UnionPay’s global network.

Read more at: Caixin

Recent regulation changes allow foreign private funds to invest onshore

Whilst previously foreign fund companies permitted to raise funds in China could only make investment overseas, China has published rules allowing foreign private fund companies to sell products in the country and invest funds received in the A-share market. These changes in regulation pave the way for foreign fund companies to tap China’s growing demand for wealth management services by broadening the scope of securities they can buy for clients to include those issued and traded on the Shanghai and Shenzhen stock exchanges.

The operating guidelines, published on Thursday by the Asset Management Association of China (AMAC), a government-affiliated industry group, cleared the last hurdle for foreign private funds to invest onshore.  However, the rules advice that foreign-invested firms conducting investment business in China are prohibited from placing orders through institutions or systems outside the mainland. They must keep full records of all transactions, separate their investments in China from those in foreign markets, and comply with the Chinese government’s foreign-exchange regulations, as well as disclosing all major equity investments in other enterprises in China and connections, if any, to other foreign companies that may have significant influence over their asset management business in China.

Read more at: Caixin