Business
Chinese Tycoons Leverage Stock for Private Loans as Bank Liquidity Wanes Amid Fed Easing Anticipation
Wealthy Chinese individuals are leveraging their shares to secure loans from private financiers due to the dwindling bank liquidity. As the Federal Reserve is set to relax its policies, these clients are once more at ease with employing their stocks as security for project finances, an HSBC executive points out.
Wealthy individuals in Hong Kong and mainland China, grappling with cash flow issues, are progressively resorting to private loan services and leveraging their shares as security for loans.
The revival of public capital markets is still underway, leading conventional banks to be wary with their loans. At the same time, issues persist in the real estate market, making shares the preferred choice of collateral for some extremely wealthy people to create liquidity.
"The potential for equity-supported lending for Chinese borrowers with limited liquidity is massive for us and other private credit lenders," stated Crosbie-Walsh from Hong Kong.
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