Cumulative Issuance of Asset-backed Securities in China Doubled Last Year

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The latest data from the Asset Management Association of China points to roaring growth in asset-backed securities issuance.

Figures released by AMAC on 5 March indicate that as of the end of 2017 the cumulative volume of asset-backed securities (ABS) issued stood at 1.61 trillion yuan (approx. USD$260 billion), for an increase of 133.56% compared to a year previously.

ABS have seen surging growth in China over the past several years, following the government’s launch of an official registration system at the end of 2014.

Chinese regulators note that brokerages continue to dominate the ABS space, accounting for 80% of issuers, with around 20% consisting of investment funds subsidiaries.

Five Chinese brokerages have ABS issuance volumes of over 50 billion yuan, including Tebon Securities, China International Capital Corporation, Huatai Securities, CITIC Securities and Guotai Junan Securities.

Competition in the asset securitisation sector has been intense, with Tebon rising abruptly from 11th place at the end of 2016 to first place in 2017.

The volume of ABS outstanding stood at 1.17 trillion yuan as of the end of 2017, with brokerage-issued products accounting for 956.85 billion, or 81.71%, and investment fund subsidiaries 214.222 billion yuan, or 18.29%.

Real-estate Investment Trusts  (REIT) and Commerce Mortgage-backed Securities (CMBS) continue to be two of the most popular ABS products.

AMAC data further indicates that there are over 500 originators for ABS, including around 110 financial leasing companies, around 40 micro-loan companies, 26 banks, 18 brokerages, 18 trust companies, 14 factoring companies, 9 residential housing funds and 3 aviation companies.

Originators are concentrated in the finance, leasing and real estate sectors, which jointly account for 1.3378 trillion yuan in issuance or nearly 83% of the total.

 

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