90 listed blue chip firms in China will be able to lend securities to a group of 11 mainland brokerages as the country seeks to liberalize short selling, according to a report in the China Securities Journal.
The move is part of a pilot project, launched in August last year, intended to develop Chinas derivatives markets, said the journal.
The journal report said from Feb. 28 a group of 11 brokerages will be able to borrow shares in a pre-qualified pool of 90 listed blue-chip companies, citing information received from the state-owned China Securities Finance Corporation that services the pilot programme. Since the start of the pilot, they have only been allowed to borrow money from institutional investors.
The 90 stocks available for borrowing represent 9.3 trillion yuan (HK$11.5 trillion) in tradable capitalization, nearly 50% of the mainland’s A-share market.
Brokerages in the scheme reportedly include CITIC Securities, Everbright Securities, GF Securities, Guotai Junan Securities, Haitong Securities, Huatai Securities, Shengyin Wanguo Securities, China Merchants Securities and Galaxy Securities.
Meanwhile, on the currency front, Renminbi (RMB) continues its ascension towards becoming a major international payments currency, or in terms of currency, according to SWIFTs latest RMB tracker. In December 2012, the RMB was larger than the Danish Krone, South African Rand and New Zealand Dollar and has now overtaken the Russian Rouble to take position #13 as a world payments currency (see chart RMB as world payments currency).RMB payments grew in value by 171% between January 2012 and January 2013. The last month alone saw a 24% increase, versus 13% across all currencies, propelling it to an all-time high market share of 0.63%. In the same year, the RUB grew by only 18% and lost 5.4% in the last month, making it drop to 0.56% market share (see chart Chinese Renminbi overtakes Russian Rouble).
Well have to see if the drop in RUB is systemic said Lisa OConnor global RMB director at SWIFT, but it is clear that offshore centers like Hong Kong, London and Singapore are fuelling RMB payments. RMB payments in Singapore grew by 123% year-on-year and by 33% in the last month. The recent appointment of ICBC as the RMB clearing bank in Singapore can only support that. Given the acceleration of RMB payments it will be interesting to see if the RMB displaces the THB (Thai Baht) in coming months.
(JDC)