Thursday, October 22, 2009

The Debts of the Lenders: China Plans to Launch REITs

Much has been said here about the speculative bubble like nature of the Chinese equity and property markets. In this latest news, Reuters reports that Chinese fund managers plan to launch publicly traded REITs that will be listed on native exchanges. REITs typically invest in residential and commercial real estate. Since this is China a large number of commercial properties will be industrial in nature.

The addition of REITs will ease the access of institutions to retail money by allowing nearly anyone to gamble in an already overheated property and equity market. That might even include foreigners which have been pretty much restricted in their financial activities.

Further details are pending final review by the China Securities Regulatory Commission (CSRC), the financial regulatory body.
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