(Yicai Global) May 27 -- The Shanghai Stock Exchange has rejected CNY153.6 billion (USD24 billion) worth of asset-backed securities, two of which were issued by Ant Group, as China tightens up on consumer lending. 

The stock exchange’s bond information platform announced the review status of 34 ABSs, debt securities collateralized by a pool of assets, on May 25, showing that more than three-quarters were rejected. A unit of fintech giant Ant was seeking to raise CNY18 billion (USD2.8 billion) via its two issues.

The bourse stopped reviewing 26, most of which were in the fields of supply chain finance and real estate, to meet regulations on internet consumer loans, a bond trader told Yicai Global. Among other issues, the securities had unidentified debtors and lacked underlying assets, so the stock exchange, which started checking applications last year, decided to reject them, according to an informed source.

A regulatory body under the State Council, China’s cabinet, held a meeting on May 21 and called for enhanced financial supervision to rein in risks within platform companies.

Going forward, property firms should expect more prudent oversight, the bond trader said. The Shanghai Stock Exchange is striving to control the amount of funding flowing into the real estate sector while complying with regulations, the person added.

Financing for key projects should be carefully vetted as liquidity is expected to be tightened at home and abroad, said a professional in the ABS business. Speculation, and projects that go against the nation's policies, should be curbed, he added.

Editor: Emmi Laine, Xiao Yi