The new debt repurchase or repo business launched last week by the Shanghai Stock Exchange should help in the development of China’s asset-backed securities market by widening the range of collateral that can be used to include ABS.
The Shanghai Stock Exchange's revamped repo market, which previously only accepted some corporate debt and national bonds as collateral, also gives market participants the power to finalise their own transaction terms, including duration, yield, and discount, and to agree changes after an agreement takes effect.
Currently, all such deals are matched through the exchange’s open and centralised price bidding system and there is little room for the participants...
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