China's first provincial bond insurance company, Jinshang Bond Insurance, was founded in Taiyuan, Shanxi province, on Sept 28 to offer financial support to the local economy.
The enterprise, which has a registered capital of four billion yuan ($599.75 million), was set up by seven leading State-owned companies in the province, including Shanxi Financial Investment Holdings and Shanxi Energy & Traffic Investment.
To begin with, Jinshang Bond Insurance will mainly provide safe credit services for local well-run enterprises, especially the seven stockholders, and reduce investors' risks and losses on defaults.
As the business expands, it will serve more companies in local emerging industries and help transform traditional industries, such as coal, with effective financial services.
Wang Yixin, vice-governor of Shanxi, said that the establishment of Jinshang Bond Insurance is an innovation in favor of stabilizing the financial market and stimulating more investment.
“Investors tend to feel upset when quite a few businesses have financing difficulties and the rate of credit risks keeps high in the bond market," said Wang, "The company meets the market demand for improving risk sharing mechanism, which can reduce the hazard in investment."
According to the agreements signed at the announcement ceremony, Jinshang Bond Insurance will cooperate with China Bond Insurance on issuing super short-term commercial papers of 2 billion yuan for Datong Coal Mine Group.
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Lou Yangsheng, acting governor of Shanxi province, unveils the nameplate of Jinshang Bond Insurance in Taiyuan on Sept 28. The enterprise is the first provincial bond insurance company in China. [Photo/people.com.cn] |
