G.F. 326
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merchant bank named China Investment and Finance Ltd. was
jointly formed by CITIC and the Royal Bank of Canada to
undertake merchant bank business like loan syndication and
project financing. In March 1985, the Guangdong Finance
Co. Ltd. (a subsidiary of the Guangdong Enterprises Ltd.,
which is a sole agent of various Guangdong economic organisations in Hong Kong) was incorporated in Hong Kong
to provide financial facilities as well as to trade in
stocks, CDs and commercial paper in London and New York. With the growing saturation of business in the local- retail banking sector, the Bank of China is seeking to build up its merchant banking business through its incorporation of China Development Finance Co. Ltd. at the
beginning 1986. In the future, it is envisaged that the Bank of China will become increasingly active in raising funds to finance the Seventh Five-Year Plan through syndications arranged in Hong Kong.
27.
Issue of bonds and CDs: China has also turned to the international money market as an important source of funds. In this respect, the CSOBS have made use of Hong Kong's established position as an international financial centre, and have contributed much needed expertise and financial services in arranging these facilities. The following are some examples. In July 1985, CITIC successfully issued HK$300 million fixed rate 5-year bonds at 9.375%, with Chase Manhattan Asia in Hong Kong acting as lead manager for the issue. At around November, the Fujian Enterprise Co. Ltd. (a trading office of Fujian Province in Hong Kong) made a ¥10 billion (equivalent to HK$360 million) public bond issue in Japan. This was the second time Fujian Province floated bonds in the Japanese capital market. The first time was in 1983,
when ¥5 billion was raised in a private placement, which marked the first fund-raising activity by a China
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