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In China, response to pledged share meltdown stirs concern

“As defaults rose in loans backed by pledged shares, listed brokerages reported a 50 percent slump in third-quarter profit” writes Midwest Communications Inc for 95kqds.com. Those more clearly hurt by loss-making pledged share lending include brokerages such as First Capital Securities, Western Securities and Founder Securities.That sent the value of its pledged shares to near zero, hurting creditors, who must write off their loans to Zhonghong as losses.Southwest and its peers are caught in the slow-motion collapse in China of pledged share financing, in which companies’ major shareholders provide shares as collateral for loans.
 
Source: 95kqds.com



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