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China's collective trust products average yield down for 4 months by late May

May 26, 2020


Abstract : China's collective trust products saw their average yield drop for four straight months in a row to about 7.5 percent in May, reported Securities Daily, a sector portal, on Tuesday.

BEIJING, May 26 (Xinhua) – China's collective trust products saw their average yield drop for four straight months in a row to about 7.5 percent in May, reported Securities Daily, a sector portal, on Tuesday.

By the week ending May 24, the yield of collective trust products in China averaged 7.50 percent, compared to the 7.81 percent in January and also much lower than the 8.2 percent in the comparable period of last year, according to data from usetrust.com, a trust sector portal.

Compared with banks' wealth management products, though the 7.50 percent  average yield for collective trust products are not low in deed, a continued downturn is possible in light of the currently ample market liquidity and restriction over non-standard assets business of banks, said the report.

The newspaper quoting Xie Yunbo, researcher with the postdoctoral work station with Bridge Trust Co., Ltd. said enterprises now enjoy relatively loose financing environment and their reliance on trust financing reduces notably after debut of the registration-based corporate and enterprise bond issuance in China and ballooning size of their financing via asset securitization.

A rough survey by usetrust.com showed that a total of 138 collective trust products were launched during May 18-24, down 9.8 percent week on week and they raised in total 13.577 billion yuan of funds, down 38.95 percent over the week prior.

Despite a 0.06 percentage point week-on-week rise in their annualized average yield, these newly-founded collective trust products were reported of a 1.72 years long average term last week, 0.05 year less than that in the week before last week.

All of these data pointed to lessening investor favor towards mid- and long-term trust products in China.

In future, collective trust products managers should focus on improving profitability and yield of standard collective trust products to sharpen competitiveness of these products, noted Xie. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)

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