China Sees Big Loss of RMB Deposit amid Rise of Internet Finance

February 25, 2014 Leave a comment

China Sees Big Loss of RMB Deposit amid Rise of Internet Finance

02-17 16:06 Caijing

Chinese lenders lost CNY94.02 billion in RMB deposit in January from a month ago.

China is losing large amount of RMB deposit as the country’s Internet giants join a race to tap into Chinese wealth explosion.

Chinese lenders lost CNY94.02 billion in RMB deposit in January from a month ago, while M1, the narrow measure of money supply, climbed 1.2 percent year-on-year, compared with a 15.3 percent surge a year ago, the central bank said Saturday.

The loss which was the largest in nearly six years may be a result of the rise of Internet finance as Chinese Internet giants launch wealth management products with more flexibility and higher returns to lure Chinese depositors.

E-commerce giant Alibaba is eyeing longer-term fixed-income investment after Yu’e Bao, its overwhelmingly popular money market fund which offers an annualized return of higher than 6 percent, much higher than the 3.25 percent return offered by the one-year time deposit.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 13.2 percent year on year at the end of January, compared with a 15.9 percent growth for the same period last year.

Meanwhile, China’s new yuan-denominated lending reached 1.32 trillion yuan ($216 billion) in January, up 246.9 billion yuan year on year.

China’s social financing, a measure of funds raised by entities through bank credit and other means, amounted to 2.58 trillion yuan last month, surging 1.33 trillion yuan from December and up 39.9 billion yuan from a year earlier, the People’s Bank of China (PBOC) said in a statement.

Economists, however, forecast the central government will continue to tighten liquidity at a time of economic slowdown and moderate inflation.

The country’s export grew 7.3 percent year-on-year in January, a whopping 26.7 percentages down from the same period last year while CPI, a main gauge of inflation, rose 2.5 percent on a yearly basis in January, coming slightly stronger than expectations.

 

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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