Fitch: Rapid growth of Chinese investment companies is building risks

The US-based rating agency, Fitch ratings, is out with its latest report on the Chinese investment companies, their strategies and risk controls.

Key Points:

Rapid growth of Chinese investment cos is building risks

On Chinese investment cos, their strategies and risk controls have not been tested by significant market volatility or an economic downturn

Expect assets of Chinese ICs to rise by more than 25% per year over next five years

Reliance on divestment proceeds, bank loans to meet cash outflows creates risk that could push them into fire-sales in liquidity stress

Most Chinese ICs been able to meet performance targets; their strategies, risk controls not tested by significant market volatility or economic downturn