China’s peer-to-peer (P2P) lending industry, which has shrunk dramatically under a government crackdown, should get a welcome boost from the development of the Greater Bay Area, according to DBS Bank.
By 2030, P2P lending will enjoy an annual growth rate of 17% in the region, making it the fourth-fastest growing sector, SCMP reported, citing the Singaporean bank’s estimate.
“We see that P2P lending across China could reach one trillion yuan by 2030, and the Greater Bay Area with its particular focus on innovation and entrepreneurship, would be more open to the P2P concept,” said Ken Shih, senior research director at DBS.
“A capital-intensive industry upgrade is inevitable, and P2P platforms can meet the financing needs of new business formats – small and micro companies in particular,” he added.
The bank ranks P2P lending fourth in a table of estimated growth rates for different sectors in the bay area by 2030. Smart appliances top the list with a forecast 30 per cent growth rate, while P2P is just behind online advertising in third place.
Caixin Global has an interesting report out wrapping up how major investment banks are picking stocks worthy of consideration because of the Greater Bay Area masterplan unveiled recently by the State Council. Insurers such as Ping An, banks such as Bank of China (Hong Kong), and tech companies such as Tencent are among their top picks.
Ping An Insurance is headquartered in Shenzhen, listed on the Hong Kong stock exchange. It generates 18% of its premiums from Guangdong, the highest among its peers, according to DBS.
Both the Swiss-based UBS and the Singapore-based DBS picked Shenzhen-headquartered, Hong Kong-listed Tencent Holdings Ltd. DBS said it was because they believe favorable policies for fostering talent in the Greater Bay Area can increase the internet giant’s capacity for innovation.
In the property sector, UBS favored Guangzhou-based Times China Holding Ltd. and Shenzhen-based Logan Property, while DBS picked Hong Kong developer Yuexiu Property Co., China Resources Land Ltd., China Vanke Co., Guangzhou R&F Properties Co., Kerry Properties Ltd. and Shenzhen Investment Ltd.
DBS said Guangzhou-based automaker GAC Group and Shenzhen-based electric car maker BYD will get a boost as demand for automobiles is expected to rise with government investments into improving the GBA’s transportation network.
The region’s urbanization and infrastructure buildout will also boost cement producers China Resources Cement Holdings Ltd. and Anhui Conch Cement Co., and railway construction companies China Railway Construction Corp. and China Railway Group Ltd., DBS said.