Financial Services Talking Points | 30/09/2016


In today’s talking points: Rise of Peer-to-Peer lending; Australia has five years to prepare for Chinese debt risks; Fosun goup buy controlling stake in China rail public-private venture; Standard Chartered Bank China announces direct trading for UAE and Saudi currencies. 

Rise of Peer-to-Peer (P2P) lending 

Banks lending’s time consuming, lengthy and rigid procedures gave rise to peer-to-peer (P2P) or marketing place lending, platforms that offer simplified and quicker procedures, lending decisions and better interest rate deals with more transparency. Research by Transparency Market Research suggests that ‘opportunity in the global peer-to-peer market will increase to $897.85Bn by the 2024”, and China’s P2P lending market is the largest and most dynamic in the world, however many indulged in fraudulent schemes and activities. The Chinese government is in the process of building policy framework surrounding the P2P space and aims to encourage development of such platforms. 

Read more at: Nasdaq News

Australia has five years to prepare for Chinese debt risks

According to Treasurer Scott Morrison, Australia has five years to build a more resilient budget to a potential economic shock from the fast-rising debt levels in China. The IMF stressed on Wednesday that China must allow its economy to slow in order to stop a “disorderly deleveraging” in emerging markets and hitting asset prices in advanced economies. It is important that the central and local governments and administrators be wary of debt issues, and challenges could be resolved if a “comprehensive plan to address vulnerabilities in the financial sector” is implemented. 

Read more at: Australian Financial Review


Fosun group buy controlling stake in China rail public-private venture
The company will be the first private company that will have a controlling stake in an inter-city rail service. The high-speed rail service project will link the cities of Hangzhou and Taizhou. President Xi Jinping is pushing to finance economic growth, with expansion at its slowest pace in 25 years. Introducing private capital into public state owned entities could help relieve investment burdens carried by local governments. The move could pave the way for further private investment into China’s airports and ports.
Read more at: Bloomberg News
Standard Chartered Bank China announces direct trading for UAE and Saudi currencies
The bank today announced it has launched a direct business between Chinese to UAE and Chinese to Saudi currencies as bilateral trade and investment relations between China and the two countries increases. It will be the first batch of direct trading market-makers for the Ren Men Bi against the Saudi Riyal and UAE Dirham in it’s inter-bank FX market. Given that China is the UAE’s second largest trading partner and Saudi Arabia’s largest, direct transactions between the currencies promotes increased ease of transactions and seems to be a natural progression financially.
Read more at: Finance Magnates