Central bank reduces cable industry again to ease financing difficulties

The central bank this new round of directional drop quasi, for large enterprises in the capital needs, is a good news. If the cable manufacturing enterprises compared to the body, the capital chain is the blood. No funds, cable production enterprises can not live. Long-term funds hungry cable manufacturing enterprises will usher in fresh blood: the central bank on June 28th to implement directional drop quasi-financial institutions. Efforts to reduce the intensity of the unprecedented, whether it is the cable industry's own financing difficulties or triangular debt problems will be eased.

China's power cable industry production capacity and market demand growth of serious excess are slowing down, "walking", let some cable companies maintain the regular operation of the chain of funds, the closure of the phenomenon is common. Funding problems have become the first major cable companies, the killer".

In general, cable products sales only 20% of the advance payment and feed Chongguang cable manufacturing need to consume a large amount of money to buy materials, this part of the cost of its own funds needed to promote. Cable companies only through loans to support production activities, and the high cost of the loan supports the cost of supporting the cost of cable companies to bear. In addition, the phenomenon of payment is also exacerbated by the shortage of funds in the plight of cable companies.

And in the context of economic slowdown, China's cable TV companies financing difficulties, financing your problem highlights. Financing costs not only include interest rates, which also have a large part of the hidden charges, leading to the cable company, but the actual price of financing is also very high. The country has also introduced a new policy, to promote social financing costs decline, and support for the real economy's continued healthy development.

The people's Bank of China decided to implement targeted financial institutions on June 28, 2015, to support the real economy development further, and promote structural adjustment. (1) "Three rural" loans accounted for the proportion of urban commercial banks, and non County Rural Commercial bank deposit reserve ratio decreased by 0.5 percentage points. (2) In the "three rural" or small micro-enterprise loans to achieve directional drop quasi-standard large state-owned commercial banks, joint-stock commercial banks, and foreign banks reduce the deposit reserve ratio by 0.5 percentage points. (3) Reduce the deposit reserve ratio by 3 percentage points, further encouraging them to play a good role in improving the efficiency of enterprise funds.

At the same time, since June 28, 2015, the RMB benchmark interest rate and deposit in financial institutions to further reduce the cost of corporate finance. Among them, financial institutions, one-year benchmark lending rate one of the four percentage points 4.85%, one-year time deposit datum interest rate cut 0.25 percentage points 2%, other grades lending and deposit rates, individual housing provident fund deposit and loan interest rates adjusted accordingly.

After the rate cut, the cable industry is not only easier to obtain loans from banks or non bank financial institutions, but also will reduce the cost of loans, thereby reducing the company's operating costs. A large number of capital inflows will stimulate some Cable Tv Co to accelerate investment, and expand production rates. 

On the other hand, the rate cut will further lead to the devaluation of the RMB as expected, for copper, aluminum and other raw materials need to rely on imported raw materials are not good. Devaluation of the RMB will weaken the purchasing power of Chinese enterprises, may lead to the need to rely on imports of copper, aluminum and other raw materials prices. Regardless of the economic impact of the decline, it is certain that the development of the cable industry requires a lot of capital inflows.