![Zhongrong Trust's missed payments trigger fears among Chinese investors](https://i-invdn-com.investing.com/trkd-images/LYNXMPEJ7F0CE_L.jpg)
SHANGHAI (Reuters) – Anxious Chinese language retail buyers are bombarding listed corporations with questions on their publicity to Zhongrong Worldwide Belief Co after missed funds by the belief firm triggered fears of contagion throughout the nation’s monetary system.
Buyers had submitted greater than 100 inquiries to dozens of Shanghai- and Shenzhen-listed corporations by way of investor relation platforms asking whether or not they had purchased Zhongrong’s merchandise, after two listed companies disclosed late on Friday that they’d not obtained cost on maturing belief merchandise from Zhongrong.
The lengthy checklist of queries, which retains rising, suggests Zhongrong’s liquidity crunch may set off broader fears, and threat of contagion in a monetary system already beneath strain from China’s slowing financial system.
This exhibits the adverse affect of the Zhongrong incident has been “partly priced in by the market,” mentioned Huang Yan, basic supervisor of personal fund supervisor Shanghai QiuYang Capital Co.
Zhongrong, managed by Chinese language monetary conglomerate Zhongzhi Enterprise Group, historically had sizable actual property publicity. Its missed funds had added to emphasize within the monetary sector from the nation’s worsening property disaster.
One investor on Wednesday requested Shanghai-listed New China Life Insurance coverage Firm (OTC:) – which owned 14 billion yuan ($1.92 billion) of merchandise from Zhongrong on the finish of final 12 months – whether or not there was a threat of missed funds. The corporate didn’t reply.
KBC Corp, after disclosing it had 60 million yuan of unpaid mature belief merchandise from Zhongrong, informed buyers on Wednesday that different wealth administration merchandise the agency purchased have been all low-risk merchandise from banks and securities companies.
Buyers additionally requested dozens of different listed corporations together with Bescient Know-how Co, Shanghai New Imaginative and prescient Microelectronics Co, Nanhua Devices Co, Jiangsu Azure Corp whether or not they held funding merchandise associated to Zhongrong or Zhongzhi.
Most corporations both mentioned they didn’t personal such merchandise or had not responded.
Topsperity Securities mentioned roughly 60 corporations had disclosed that they owned Zhongrong’s belief merchandise, and a majority of them have been small corporations with lower than 10 billion yuan of market worth.
The dealer’s analysts say default in some merchandise “does not imply total threat within the belief trade.”
“It is extra like emotional disturbance, whereas there could also be short-term impacts on the finance sector and some corporations concerned,” they mentioned.
($1 = 7.2937 renminbi)
(This story has been refiled to repair typo in paragraph 8)