property investment products sap China's real estate problems

property investment products sap China's real estate problems ...

China investors abandon their age-old attachment to property capital, and seek return in capital markets and equities and other corners of the capital markets, demanding a crackdown on the debt-fuelled investment sector.

Since September the expense of investment funds from trust firms has risen, while the company's $3333.HK debt, adequating the owes to imposing third-income enterprise China Evergrande Group, has increased.

That shuts down the main funding channel of property developers already suffering from strict lending curbs onshore and record borrowing costs in the offshore bond market.

The Chinese investment logic collapsed. A Chinese businessman said that he'd consider transforming millions of yuan in assets of Bond's China money into The All Weather Enhanced Strategy.

Pan reckons the multi-asset fund has an annualised return of 19% and is a good investment substitute. Taking through a brochure and the smiling image of billionaire founder Ray Dalio's smiling face and a smooth and rising performance curve, Pan says that the multi-asset fund is a suitable investment substitute.

In recent years, the investment capital of China has been waning. However, even if this has stopped long for investors, its now shrinking.

According to the Chinese Trustee Association, a trust that earned millions of dollars from investing in real estate. After this years end, the investment in these real estate products totalled 2,1 trillion yuan ($379.3 billion), down 17% from the year earlier. In contrast, the investment in bonds and stocks jumped 35% to 2,8 trillion yuan.

GROWING RISKS ARISKS GROWING.

The rotation of money took steady over the last few months, with sales for property-related trust products falling 38% in September, and 55% in October, according to Use Finance & Trust Research Institute.

Serial trusts, which sell these days, have a tendency to sell, says a manager of Shenwan Hongyuan Group, who declined to be identified as unable to speak to the media.

Quant funds, or quantitative funds, employ software to automate investment decisions and often generate higher returns than bonds but carry less risk than stocks.

A large investment bank with quantitative analyses, said Jason Hsu, founder and chairman of Rayliant Global Advisors, which recently launched a multi-strategy hedge fund in China.

Shi Ke, a partner at Shanghai iFund Asset Management Co., an account-held asset bank, agrees: "We need to take precautions with property investment products. The risk of default is growing."

In recent months, China's quantitative private funds have grown to 1 trillion yuan ($1544.6 billion) and grew to about 10 times their size in 2017.

In addition to trust products, real estate products sold through bankers and independent wealth management companies also suffer after a high interest rate at Evergrande and in recent months a liquidity crunch at developer Kaisa Group (1638.HK). read more.

Jianda Ni, a real estate-focused wealth management firm with focus on new energy and technology, says there has been a negative shift of investment toward investments based on technology and innovation in sectors such as technology, and from new energy debts.

The firm is distributing products to finance projects by Yango Group Co (000671.SZ), Kaisa and Guangzhou R&F Properties Co (2258). It said it continues to diversify its product line and introduce more equity, overseas and secondary market products.

Upon commenting, it didn't provide further details.

Liang Dongqing, head of wealth management service at China International Capital Corp (CICC) told a conference in October that while real estate remains the biggest component of the Chinese household balance sheet, the demographic and liquidity driver behind China's property bull cycle have gone.

The largest opportunity for wealth managers over the next decade is the help to shift some of its existing assets from real estate, and to allocate their assets in order to share China's future economic growth.

$11 = 6.3776 Chinese yuan)

: The Standards.

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