China’s securitisation market, potentially one of the biggest in Asia, is on the cusp of expansion amid twin pressure on local property developers to diversify funding from bank loans, and on banks to better manage risk in their real estate loan portfolios.

Fixed-income analysts at HSBC said in a report that “a window of opportunity” is opening for China’s real estate securitisation market to take off with the support of local financial regulators, who are keen to break domestic developers’ reliance on interbank lending and have the banks better manage their “regulatory and economic risk”.