Leveraged buyout is barbarian, China’s watchdog chief says
The most important and market-moving stories from the Chinese-language media
Liu Shiyu, chairman of the China Securities Regulatory Commission, likened the boom in leveraged buyouts with the acts of “barbarians” and “thugs,” in a talk delivered on Saturday, Xinhua news agency reported. The usually low-profile watchdog went off script and targeted insurers, the report said. “Some with financial licenses enter the market, carrying out leveraged buyouts with funds from the public,” Liu said. “It is the mass investors who bear the risk.” Chen Wenhui, vice-chairman of the China Insurance Regulatory Commission, said on sina.com that insurers were committing crimes when circumventing capital controls and had shortcomings when managing risks.
China securities regulator approves 13 IPOs, raising up to 7.5 billion yuan
The China Securities Regulatory Commission approved the listing of 13 companies, raising up to 7.5 billion yuan (US$1.09 billion) in total, Xinhua news agency reported Friday night, without citing an exact timeframe. Meanwhile, Dalian Wanda chairman Wang Jianlin said its Wanda Sports unit would eventually seek a listing, Phoenix Finance reported on Sunday. Wang hoped that the sports unit could at least generate a 10-digit profit by 2020, and could be an “extraordinarily outstanding” company in the Chinese stock market.
Shenzhen-HK Stock Connect launches Monday
Around 400 billion to 500 billion yuan was expected to enter Hong Kong’s stock market under a new scheme that would be more positive for the city than for Shenzhen in mainland China, The Economic Observer said, quoting Chen Jie, an analyst with GF Securities, in a Sunday report. The Shenzhen-HongHong Kong Stock Connect launches on Monday. Brokerage Guotai Junan estimated China’s stock would see an inflow of 75 billion to 150 billion yuan, Sina Finance said earlier.
Jiaxing city clamps down on property buyers
Jiaxing, a city in eastern Zhejiang province, has prohibited residents without local household registration to purchase second homes, whether new or secondary, in urban areas, Xinhua news agency reported on Saturday. The city’s property prices have increased remarkably due to a spillover effect from nearby Shanghai, the report said.
China economy ‘to hit bottom in two years’
China’s economy has a high chance of bottoming out in the next one or two years, said Liu Shijin, deputy chairman of the China Development Research Foundation, a State Council-initiated group, China News Service reported. This would happen only if the supply-side reform yielded substantial progress, and the government could then push for reform of rural land ownership, Liu told the 14th China Reform Forum on Sunday. Fan Gang, a member of the monetary policy committee under the People’s Bank of China, said recent economic data showed corporate performance was stabilizing and economic growth would resume, with GDP expected of 6.5% to 7%, Xinhua news agency reported on Saturday.
77 more stocks eligible for securities margin trading in Shanghai and Shenzhen
The Shanghai and Shenzhen stock exchanges included 77 more stocks on their eligibility list for securities margin trading, they announced last Friday, effective from December 12. Stocks of companies with a P/E ratio over 300 or in fiscal deficit could not be taken as trading collateral, the online notice said, but the new rule would not be applicable to contracts signed on or before December 9. The two stock exchanges would also develop a system to determine if a stock is eligible for securities margin trading on a quarterly basis.