Zhongrong Trust’s missed payments trigger fears among Chinese investors

zhongrong-trust’s-missed-payments-trigger-fears-among-chinese-investors
Zhongrong Trust’s missed payments trigger fears among Chinese investors

Chinese retail investors are expressing their concerns about the potential impact of Zhongrong International Trust Co’s missed payments on listed companies. These investors have bombarded Shanghai- and Shenzhen-listed companies with questions regarding their exposure to Zhongrong’s products. The growing list of queries indicates that there is a risk of contagion in China’s financial system, which is already under pressure due to the country’s slowing economy.

According to Zhongrong’s latest annual report, the company managed assets worth 785.7 billion yuan, with 629.3 billion yuan linked to trust products. Huang Yan, the general manager of Shanghai QiuYang Capital Co, believes that the negative impact of the Zhongrong incident has already been partially reflected in the market.

Zhongrong, which is controlled by Zhongzhi Enterprise Group, has traditionally had significant exposure to real estate. The missed payments by Zhongrong have added to the stress in the financial sector caused by China’s worsening property crisis.

Investors have also directed their questions to other listed companies, including New China Life Insurance Company, KBC Corp, Bescient Technology Co, Shanghai New Vision Microelectronics Co, Nanhua Instruments Co, and Jiangsu Azure Corp. These companies have either denied owning Zhongrong-related products or have not responded to the inquiries.

Topsperity Securities has reported that approximately 60 companies have disclosed their ownership of Zhongrong’s trust products. Most of these companies are small, with a market value of less than 10 billion yuan. Analysts from the brokerage firm believe that defaults in some products do not indicate overall risk in the trust industry. They view the situation as more of an emotional disturbance with potential short-term impacts on the finance sector and a few involved companies.

In conclusion, the concerns of Chinese retail investors regarding Zhongrong’s missed payments have prompted them to question listed companies about their exposure to the trust company. This situation has raised fears of contagion in China’s financial system, which is already facing challenges due to the country’s slowing economy and worsening property crisis.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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