June 21, 2019 / 1:38 PM / a month ago

Leading Chinese brokerages see limit for outstanding commercial bills raised

BEIJING (Reuters) - At least two leading Chinese brokerages’ upper limit for outstanding commercial bill issuance - a key form of short-term fundraising in the interbank market - have been increased, exchange filings showed on Friday.

China’s securities watchdog has told several large non-bank financial institutions not to cut smaller non-banks off as counterparties in the interbank market, and to lend to them to help ease any cash shortfalls, Reuters reported on Monday.

Money markets in China were rattled after regulators took control of Inner Mongolia-based Baoshang Bank on May 24 due to “serious” credit risks, and some smaller non-banks have suffered liquidity crunches since then.

China’s Citic Securities said its upper limit for outstanding commercial bill issues was now at 46.9 billion yuan (5.4 billion pounds), a statement filed to the Shanghai Stock Exchange showed. Its last filing on May 31 showed this limit was set at a much lower 15.9 billion yuan.

Huatai Securities said on Friday that its limit for issuing such bills now stands at 30 billion yuan, up from 21.6 billion yuan as shown by an April filing.

Also on Friday, Haitong Securities said its upper limit for such bills was now touching 39.7 billion yuan, while Guotai Junan Securities said its limit for short-term bills was now set at 50.8 billion yuan. It was not immediately clear whether these figures marked clear increases.

Reporting by Cheng Leng, Ryan Woo and Beijing Monitoring Desk; Editing by Hugh Lawson

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