Loans Fueling Stock Speculation

Last week I linked to story on Chinese loan growth funneling into the stock market. (See 为什么大陆股市反弹?)

Now Caijing tackles the topic in Decoding the 1.6 Trillion Enigma.

When companies get a loan, they can put a portion of the money in their business accounts, use a portion to raise capital and buy bonds, and keep the rest in hand for immediate uses. Deducting the amount money that went into these four outlets, there was still 830 billion yuan of the January loans that cannot be explained – that’s 500 to 600 billion more yuan compared to the previous two years. This chunk of untracked money probably found its way into the stock market, awaiting the rebound of share prices.

We found strong correlation of 0.66 between the unexplainable part of increased loans and the price hike of Shanghai stock index in the last three years.

沈明高认为,信贷资金主要有三个去向:流入股市、直接用于投资和转为个人储蓄存款。经初步估算,最多有5000亿-6000亿元的信贷资金进入股市。沈明高是从企业资金使用的角度来分析企业信贷资金的流向。他指出,企业从银行贷入的资金可能转变为企业存 款、流通中的现金、在一级市场认购股票和缴税。

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