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Financial
markets
Survey: Year of change for
China's bourses
2005 was a watershed year for
the Chinese stock markets, which have seen a
remarkable array of changes, including split-share
and brokerage reforms, a new securities law and
more opportunities for qualified foreign
investors.
- Mark A
DeWeaver (Dec 15, '05)
New rules for red
chips
Fearing that the Shanghai and Shenzhen
stock exchange bubble may burst if action is not
taken, Beijing is increasing share supply by
issuing provisional rules that make it easier for
Hong Kong-listed red-chip enterprises to return
home and list on the Chinese market. -
Olivia Chung
(Jun 14,
'07)
China's other bull is
solid gold
As China's stock markets soar
to what appear unsustainably levels, the Shanghai
Gold Exchange is also booming. And the odds are
that any major Chinese stock selloff will lead to
an even bigger surge in gold demand in the
country. (Jun
11, '07)
A warning shot for China's
markets
The Chinese markets
gave their instant verdict on an overnight
increase in stamp duty for securities transactions
by plunging more than 6% on Wednesday. Normal
business is expected to resume soon, once the news
is fully digested. But if the bull again starts to
run too far and too fast, the authorities can be
expected to bring out a much bigger stick. -
John Ng (May 30,
'07)
 SUN
WUKONG
Politicizing
China's
stock market
bubble
Because they know a
crash would be far too politically damaging to
China's leaders while the spotlight is on them,
the country's investors are confident that Beijing
will not take harsh measures to deflate the
country's stock market bubble until well after the
17th National Congress of the Chinese Communist
Party in the autumn. - Wu Zhong
(May 29,
'07)
China opens door to foreign
bourses
New rules allow
overseas stock exchanges to establish
representative offices in China. However, the
rules state that they can only carry out
non-operating functions such as promotion and
research. (May
21, '07)
China investors undeterred by chill
measures
Moves aimed at
cooling China's sizzling stock markets - including
raising interest rates and the bank reserve ratio
and widening the yuan's trading band - have done
little to deter the Asian powerhouse's 100 million
investors. - Olivia Chung (May 21,
'07)
Hong Kong
bourse wakes up sober
The announcement by Chinese
authorities that mainland banks would be allowed
to invest in overseas equities sent Hong Kong's
Hang Seng stock index soaring to record highs on
Monday and Tuesday morning. Then sober heads
pointed out that only US$13.4 billion would be
available for such investment, and the Hong Kong
bourse woke up with a hangover. - John Ng (May 15,
'07)
Central bank: Deposits diverted to
stocks
Chinese households
are draining their savings accounts and pumping
the cash into the country's red-hot stock market,
raising fears that millions of small investors
could be hurt if there is a sharp fall.
(May 14,
'07)
 CHAN
AKYA
June 4 for Asian
stocks
Having lost control of the
stock markets, Chinese regulators are left with no
option but to enact multiple policy moves,
including a freeing up of the currency regime. The
result will be massive losses for speculators, as
well as many of the biggest banks in the country.
But it won't stop there; all Asian stock markets
will face a chilling downturn in the aftermath.
(May 11,
'07)
Liquidity boom and looming
crisis
A debt-driven financial crisis threatens to
put an end to the liquidity boom and the
accompanying global financial mania that has
decoupled equity markets from economic reality.
All will melt away in a catastrophic unwinding
some Tuesday morning (New York time). And China
cannot save the world. It's part of the problem. -
Henry C K Liu (May 8, '07)
SUN
WUKING
Masses rise up and buy
stocks
The
Chinese, forever given to mass movements, are
storming the bourses to speculate in stocks. Taxi
drivers, students and civil servants, who can make
the equivalent of a month's salary in a day of
trading, are at the forefront of the revolution,
undeterred by price/earnings ratios in the
thousands and quaint adages like "what goes up
must come down": this, after all, is a market with
Chinese characteristics. More sober analysts,
however, predict a 30% correction before the end
of the year. - Wu Zhong (May 8, '07)
Stock exchanges seek Chinese
listings
Chinese companies have emerged as a new
power in world capital markets, with major bourses
stepping up their efforts to recruit such
companies to list with them. In 2006, 86 Chinese
firms raised $44 billion from overseas initial
public offerings and accounted for 19% of the
world total. (Apr 10, '07)
Shanghai bourse gaining on Hong
Kong
The Shanghai Stock Exchange is expected to
take more initial public offerings this year than
Hong Kong by capitalization, giving rise to hopes
that it could emerge as a major capital market in
the region to rival Tokyo, London or even New
York. - Candy
Zeng (Apr 5,
'07)
It's not China's markets - it's the model
 Although Chinese stock markets
have bounced back to record highs, the Shanghai
market's meltdown in February underscored the need
for China to change its economic model for the
long term. Without changes, the Asian powerhouse
increasingly runs the risk of a major crisis that
will encompass a harsh economic downturn and
socio-political upheaval that will reverberate
around the world. - Scott B MacDonald
(Apr 3,
'07)
Investors warned on funds
fervor
Boosted by the country's bullish stock
market, Chinese investment funds hit a new record
for combined operating profits in 2006 of US$33.9
billion, prompting the authorities to warn the
public of the potential risks. (Apr 2, '07)
Africa frenzy feeds China stock bubble
Chinese
companies have in recent years been flocking to
Africa, investing huge sums and boasting about
"digging up gold" in the "uncultivated continent".
However, some of the projects they are involved in
are turning out to be too good to be true. -
Zhou Jiangong (Mar 26, '07)
Beijing ponders red-chip
dual-listing
How to boost the development of the
country's fledgling financial industry by letting
offshore-incorporated and overseas-listed
companies, or red chips, dually list on the
Shanghai and Shenzhen bourses is one of the hot
topics in China's parliament. - Olivia
Chung (Mar
14, '07)
Hong Kong dollar takes a back
seat
With the
rise of the value of the yuan, the once-mighty
Hong Kong dollar is no longer widely accepted in
Shenzhen, the only city in China where it is
legally circulated. However, the rising yuan will
likely benefit Hong Kong, including more mainland
funds flowing into its stock market. -
Olivia Chung (Mar 9,
'07)
China to monitor stocks more
closely
As
hundreds of thousands of investors plunge
gleefully into the stock markets, China's banking
watchdog will investigate concerns that bank loans
are fueling speculation, which could result in an
avalanche of non-performing loans. (Mar 6, '07)
India 1, China
0
China made a
mess of its financial-market regulation this week,
even as India charged ahead, albeit with a
reform-chary government acting as the proverbial
millstone. Structural factors provide a distinct
advantage to India as the rule of law and stronger
institutions help to dull market volatility.
Chinese market policies, in contrast, are
reminiscent of tin-pot dictatorships. (Mar 2, '07)
Beijing soothes the
bears
Following the precipitous fall of China's
market on Tuesday and subsequent rally, Beijing
has assured that it has no plans to impose a
capital gains tax on stock investments, which was
the rumor that set off the drop in the first
place. (Mar 1,
'07)
China 'correction' rattles world
markets
The
so-called "meltdown" of the Chinese stock market
on Tuesday sent shock waves around the world,
highlighting the fact that the Asian powerhouse is
now one of the main drivers of global economic
activity and one of the main barometers of global
risk conditions. The good news, especially for all
commodity producers, is that the Chinese
correction was not a result of fundamental
economic problems. - Walter T Molano
(Feb 28,
'07)
Fears over
Shanghai's red-hot bourse
The Chinese
government is becoming increasingly concerned
about the unprecedented rise of the Shanghai Stock
Exchange's composite index, which broke
through the 3,000-point mark for the first time
just before the markets closed for the Chinese New
Year holiday. (Feb 20,
'07)
Valuation exception for state financial
firms
In a
move intended to deter China's financial firms
from making asset valuations based on state-owned
capital in shares that show only transitory gains,
increases in stock market valuations will be
excluded from government evaluations of
state-owned financial firms, China's Ministry of
Finance has announced. (Feb 13, '07)
Surge in retail stock market
investment
China's stock markets have seen a 10%
increase in retail investment - 80 million in
January. This seems like good news on the surface,
but there are fears that it will lead to an
imbalance between the power of institutional and
retail investors, causing valuation to surge ahead
of itself on the back of rash, speculative
investment decisions by individual players.
(Feb 7,
'07)
China stock feeding frenzy: Don't get
bitten
China's white-hot
bourses have investors in a frenzy - robust
economic growth, the anticipated appreciation of
the yuan, successful reforms to dispose of
non-tradable state holdings, and massive capital
inflow are combining to usher in a new "golden
era". Beware: it could be a bubble waiting to
burst in the faces of the greedy, and government
intervention to cool things down is likely. -
Zhou Jiangong (Jan 16,
'07)
Greater
flexibility for yuan exchange rate
China's government has announced that it will
allow greater flexibility for the yuan's exchange
rate as the country recorded a
higher-than-expected foreign trade surplus - it
jumped 74% to a record US$177.5 billion in 2006. -
John Ng (Jan 12,
'07)
Beijing gives nod to Hong Kong yuan
bonds
In a
move aimed at strengthening Hong Kong's position
as an international financial hub, China's central
government has agreed to allow qualified mainland
financial institutions to issue yuan bonds in the
special administrative region. - John Ng
(Jan 11,
'07)
Mainland set to overtake Hong Kong in
IPOs
Steady
yuan revaluation and bullish sentiments on the
Shanghai and Shenzhen
bourses will lure more and more
overseas-listed Chinese companies to make
their initial public offerings back home. As a
result, mainland China's IPOs
are poised to overtake Hong Kong's this
year. - Olivia Chung (Jan 10,
'07)
HK market capitalization at all-time
high
The Hong
Kong Stock Exchange's total market capitalization
now well exceeds US$1.54 trillion, surpassing that
of Germany to become the seventh-largest in the
world. (Dec 21,
'06)
China watchdog supports HK
listings
Taking advantage of Hong Kong's status as
an international financial center is the key to
implementing reforms, as well a strengthening
corporate governance and improving international
competitiveness, says a mainland official.
(Nov 30,
'06)
The perils of yuan
parity
China
has hit a financial milestone, with the value of
the yuan virtually matching that of the Hong Kong
dollar. The rising mainland currency is already
affecting trade in next-door Shenzhen, where Hong
Kong shoppers find their money has less value than
they are used to. On the other hand, rising land
values are good news for cross-border home buyers.
- John Ng (Nov 30,
'06)
A-shares bounce
back
China's
A-shares have clawed their way back from
disastrous declines, thanks in part to improved
supervision, and they are tipped to keep rising.
(Nov 22,
'06)
China's stock markets
soar
China's
stock markets saw their market value more than
double in the past 11 months, exceeding US$825.8
billion and accounting for 46% of gross domestic
product. (Nov
17, '06)
China
sings its old refrain for
Paulson
As US Treasury Secretary
Henry Paulson wraps up his visit to China, he is
hearing an old refrain load and clear: the
yuan will be revalued only when Beijing is good
and ready. But that's not stopping the currency
hitting new highs almost daily. - Wu
Zhong (Sep
22, '06)
Chinese shares down
$50bn
The total value of shares already listed on
the Chinese market was reduced by more than 400
billion yuan (US$50 billion) after the country
resumed initial public offerings in June.
(Aug 2,
'06)
Bank of China debuts on
Shanghai bourse
The A-shares of the Bank of China, which has
replaced Sinopec as the biggest heavyweight on
China's domestic stock market, debuted on the
Shanghai Stock Exchange July 5. (Jul 5, '06)
Yuan should be hard
currency: Article
A Tsinghua University academic has written an
article in the People's Daily advocating hard
currency status for the yuan, noting that all
other economies of China's size have an
internationalized currency. (Jul 5, '06)
Investment walls come down for
insurers
In the most important regulatory change for
China's insurance industry in 20 years, the China
Insurance Regulatory Commission issued a circular
allowing insurers to invest more funds in
securities markets and other sectors. (Jun 30, '06)
Financial reform has long way to
go
It has embraced market
economics, but now two starkly contrasting futures
beckon China: one, an economy under the rule of
law, with a civilized political order; the
other, crony capitalism.
-
Swati Lodh Kundu (Jun 26, '06)
Yuan tipped
to further
appreciate
The
yuan will witness an appreciation trend in 2007,
and is likely to appreciate by a large degree,
said Yu Yongding, a member of Chinese central
bank's monetary policy committee. (Jun 26, '06)
Officials urge converting
forex into gold
A recent article published in China by two
central bank officials advocates the conversion of
some foreign exchange reserves into gold to avoid
depreciation due to the decline of the US dollar.
(Jun 23,
'06)
Polyethylene futures
planned
China,
the world's largest polyethylene importer and its
second-biggest consumer, is planning to launch
linear low density polyethylene futures on the
Dalian Commodity Exchange, one of the country's
three futures bourses. (Jun 15, '06)
Citizens decrease saving,
borrow more
China's population has slightly reduced its
savings propensity and is also more willing to
borrow, according to a monthly report from China's
central bank. (Jun 15, '06)
Hong Kong's
pull threatens Taiwan's
bourse
Taiwan forbids its companies
from listing in Taipei if more than 40% of their
assets are held in mainland China. This
restriction has become increasingly onerous to
Taiwanese firms, who have begun to list in Hong
Kong instead, prompting worries that Taiwan's own
market will become marginalized over time. -
Ting-I Tsai
(Jun 15,
'06)
Chinese shares plummet 5.34%
Wednesday
Chinese shares fell 5.34% June 7, the biggest
drop in four and a half years. Analysts denied
that an imminent slew of initial public offerings
on mainland markets was to blame. (Jun 8, '06)
Taiwan
bourse shrugs off Chen
scandal
The stock markets in Taiwan, usually
sensitive to political developments, have reacted
mildly to the current crisis over a corruption
scandal centered on President Chen Shui-bian's
son-in-law. But analysts say the island's economy
will continue to underperform until more normal
links with mainland China are permitted. -
Craig Meer (Jun 7, '06)
Domestic market rebound
seen near peak
China's domestic markets have recovered about
half of the 55% of market value lost between
mid-2001 and mid-2005, but analysts are predicting
a pause in the current rebound. Meanwhile, Beijing
has issued new rules allowing foreign investment
firms greater latitude to invest in domestically
listed companies. (Jun 7, '06)
Chinese SMEs to go public in
Shenzhen
The
Shenzhen Small and Medium-sized Enterprises (SME)
Board is expected to list its first batch of
companies soon since the government lifted a
year-long ban on initial public offerings (IPOs).
(May 26, '06)
First IPO in a year to debut
in Shenzhen
CAMC Engineering is to make
an initial public offering (IPO) of 60 million
shares on the Shenzhen Stock Exchange on June 5,
marking the resumption of IPOs on China's domestic
stock markets after one year of suspension to
facilitate the ongoing split-share structure
reform. (May 25, '06)
QDIIs unlikely fools in Hong
Kong market
A key prop for the
Hong Kong bourse has been the hope for new fund
inflows due to the inauguration of China's
qualified domestic institutional investor (QDII)
scheme, which allows mainland China institutions
to invest overseas. The problem is, those
institutions are less likely to buy Hong Kong
stocks than most people think. - Mark A DeWeaver
(May 23, '06)
ICBC confirms 2006 listing
plans
Jiang Jianqing, chairman of
the Industrial and Commercial Bank of China, has
confirmed that China's biggest state bank would
sell shares to the public in 2006, following on
the heels of the China Construction Bank and the
Bank of China in a market listing rush.
(May 22, '06)
China reveals amended stock
market rules
China's two stock exchanges
revealed amended trading rules May 15, which
contain a variety of measures to cope with the new
circumstances after the completion of the
split-share structure reforms. (May 18,
'06)
Greater China IPOs surpass
EU, US
Initial
public offerings in the Greater China region now
attract more investor funds than those in the US
or Europe. The investor interest is such that Hong
Kong should ride out without difficulty the
resumption of mainland IPOs, say analysts, as
shown by the buzz around the Bank of China's IPO,
expected this year. (May 16,
'06)
The people's forex liberation
army
With the yuan dipping below 8
to the US dollar on May 15, more attention than
ever is being focused on China's foreign exchange
policies. In fact, those policies are in great
flux: Beijing is permitting more rapid movements
in the yuan, allowing companies a freer hand with
foreign currency, and encouraging the Chinese
public to hold more forex - thus shifting to them
some of the associated risks. - Wu Zhong (May 15,
'06)
Lawmakers angered by China
verdict
US Treasury Secretary John
Snow, speaking for the Bush administration on
Wednesday, declined to cite China as a "currency
manipulator" - weakening prospects for the various
bills circulating in the US Congress intended to
force appreciation of the yuan. But the yuan
dispute isn't over yet: anger over the issue in
the US remains widespread and bipartisan, with
commentators such as Peter
Morici irked over Snow's virtually borrowing
from Beijing's own script. (May 11,
'06)
 Backdown on yuan irks
legislators
- David M Lenard
Bush caves in to Chinese
mercantilism
- Peter Morici
Statement by John
Snow
One-year ban on stock sales
lifted
China lifted a one-year ban
on share sales May 8 for companies meeting certain
conditions. Though share offerings, convertible
bonds and other securities types were mentioned in
the new rules, initial public offerings were not
included for the time being. (May 10,
'06)
Futures transactions surge
50% in April
Trading on China's three
futures markets, in Shanghai, Dalian and
Zhengzhou, continued to be hectic in April, with
the total transaction value rising more than 50%
year-on-year. (May 10, '06)
Hong Kong market worth HK$10
trillion
The
historic breaching of the 10 trillion Hong Kong dollar market
capitalization milestone by Hong Kong's stock
market May 3 is being called a vote of confidence
in Hong Kong's economy by foreign investors.
(May 5, '06)
Korea, China, Japan to
cooperate financially
Finance ministers from South
Korea, Japan and China agreed Thursday to make
further efforts on financial cooperation in the
Asian region. (May 4, '06)
Yes, Virginia, it's the
yuan
The relentless condemnation
of US politicians' calls to revalue the yuan has
only obscured the issue under debate. The fact is,
there are good reasons to believe that faster
appreciation of the yuan would be helpful, not
only for the US, but for China as well; and it
could be done without triggering the instability
that China fears. - Peter
Morici (May 2, '06)
China follows world trend in
raising rates
China's decision to raise its
benchmark interest rate, along with similar moves
by the US Federal Reserve, adds to the impression
that other central banks are also going to raise
rates and ultimately boost their currencies.
Asians can cope, but the US may be hurt. - Laurence Lau (May 1,
'06)
Hong Kong's latest
bubble
The Hong Kong markets
are roaring - pumped up by petrodollar money
diverted in the wake of the Dubai ports incident
and Chinese companies wary of recently tightened
US accounting standards. To quote the cartoon
character Johnny Bravo: "This won't end well." -
John Berthelsen
(Apr 27, '06)
Asian currencies boosted by
slowing US
Analysts are predicting
continued appreciation of Asian currencies against
the US dollar in light of upward pressure on the
yuan and a cooling US economy. (Apr 25,
'06)
A cure for China's primary
share phobia
With China's primary share
market expected to reopen soon after being shut
down for almost two years, the key question is
whether new share issuances will trigger a bear
market, as they have in the past. The short answer
is, probably not - China's regulators seem to be
learning from past mistakes. - Mark A DeWeaver
(Apr 24, '06)
Banks need "mixed
operations": Forum
Combined financial operations
- ie, participation of banks in the insurance,
securities or fund management industries - are
necessary for the development of China's financial
sector and will gradually become more common,
according to an official. (Apr 24,
'06)
GDP figures revive
overheating fears
Red-hot GDP growth figures of
10.2% for the first quarter have been confirmed by
China's National Bureau of Statistics. Though the
bureau denied the economy was overheating, the
State Council had decided earlier that economic
data did indeed show excessive growth, and experts
predicted a reintroduction of cooling policies
soon. (Apr 21, '06)
Time to go for Hong Kong
dollar peg
With the yuan creeping upward
and the Hong Kong dollar still pegged to the US
dollar, it may not be long before the yuan becomes
stronger in dollar terms. The reality is that Hong
Kong needs to float or re-peg its currency. But do
its politicians have the will? - Laurence Lau (Apr 17,
'06)
Tokyo Stock Exchange to open
Beijing office
The Tokyo Stock Exchange
plans to open an office in Beijing this year with
an eye toward scouting and attracting potential
listing candidates. (Apr 4,
'06)
Yuan rises to new high ahead
of Hu visit
China's currency strengthened
March 31 to its highest level against the US
dollar since its July 21 revaluation ahead of a
planned visit by Chinese President Hu Jintao to
Washington. (Apr 3, '06)
Shift seen in US-China trade
policy
The Schumer-Graham tariff
bill seems dead in the water following a China
visit by its sponsors, after which they agreed to
delay any vote by six months. A competing bill may
have better prospects, reports Frederick W Stakelbeck
Jr. Meanwhile, Commerce Secretary Carlos
Gutierrez, now in China, has made remarks that may
indicate a significant shift in emphasis of US
trade policy on China. (Mar 30,
'06)
Schumer-Graham 'nuke'
holstered
-
Frederick W Stakelbeck Jr
Gutierrez heralds
policy shift
US senators at ease over
yuan's reform
Two US senators leading an
effort to force trade and currency "concessions"
from China say they are now more optimistic about
China's currency reform. (Mar 24,
'06)
Turbocharging China's
financial markets
Participants in China's
financial markets may soon have new opportunities
both to hedge their bets and lever them up using
futures, options and margin trading. But just as
turbocharging a car engine for extra performance
can damage it unless the engine's basic structure
can handle the pressure, these new measures may
not put China's markets in the fast lane just yet.
- Mark A DeWeaver
(Mar 21, '06)
THE WAGES OF
NEO-LIBERALISM
PART 1: Core
contradictions
Despite all evidence, the US
in particular continues to delude itself that fair
exchange rates, especially for the Chinese yuan,
would solve economic ills. But Western
exchange-rate policies have long been part of the
problem; what economies worldwide should be
floating is wages, not exchange rates. - Henry C K
Liu (Mar 21, '06)
Yuan at record high before US
senators' visit
As three US senators
who are leading a congressional drive to pressure
China to further revalue the yuan prepare to visit
Beijing this week, China's currency has
strengthened to its highest level against the
dollar since its revaluation in July. (Mar 20,
'06)
China's overseas listings
under fire
An
unusual debate has surfaced in the Chinese press
over the policy of listing Chinese firms on
overseas stock markets. Critics claim the practice
has marginalized China's own stock markets and
prevented ordinary people from harvesting the
fruits of the country's growth. (Mar 17,
'06)
Two new state IPOs marketed
in Hong Kong
Two
state companies, a building materials supplier and
a Hunan-based nonferrous metals firm with
extensive tungsten reserves, are marketing initial
public offerings in Hong Kong. Many additional
listings are expected by mid-year. (Mar 16,
'06)
Trading brisk in futures
markets
Trading on China's three
futures markets was brisk in the first two months
of this year, with transactions value surging more
than 80% on a year-on-year basis. (Mar 16,
'06)
New agency to supervise
unlisted companies China is planning to put all
non-listed public companies under the supervision
of a new division of the current securities
watchdog, a move that experts say is critical to
establishing a multi-layer capital market.
(Mar 10, '06)
SPEAKING FREELY
China's reverse Marshall
Plan
Under the Marshall Plan, the
wealthy US lent dollars to war-ravaged Europe. But
we now see an inverted version in which China, a
developing country, recycles dollars earned from
exporting to the United States by buying US
securities. History will show that China has been
the main beneficiary of this strange arrangement.
- Max Fraad Wolff and
Richard Wolff
(Mar 7, '06)
Bank of China plans Hong Kong
IPO
The Bank of China expects to
raise as much as US$8 billion in a Hong Kong
initial public offering in June after shelving
plans for a simultaneous sale in Shanghai, sources
involved in the sale said. (Mar 2, '06)
Korea, China mull
joint stock market
listing
South Korea and China will
hold a meeting aimed at accelerating their efforts
to allow companies to be listed on both nations'
stock markets. (Mar 1, '06)
Yuan to remain stable in
2006: central bank
The
People's Bank of China, China's central bank,
restated February 21 its position that the yuan
will stay stable in 2006. (Feb 22,
'06)
Foreigners to be allowed
A-share accounts
Foreign investors who have
purchased Chinese A-shares have been permitted to
directly open accounts for trading those shares,
according to a February 14 notice by the China
Securities Depository and Clearing Corporation.
(Feb 15, '06)
Mainland companies set to
boost HK bourse
The inclusion of
mainland-based companies in Hong Kong's benchmark
Hang Seng index later this year will make it
easier for overseas investors to buy mainland
companies' stocks, experts said. (Feb 14,
'06)
China-US interest rate gap
defended
A Chinese official has
defended the interest rate gap between the US and
China (US Treasury bill yields are now
considerably higher), noting that it provides
favorable conditions for China to adjust its
exchange-rate and macroeconomic policies,
particularly by deterring speculation on the yuan.
(Feb 14, '06)
Bank of China to list in
HK, Shanghai
The
Bank of China has announced that its upcoming IPO
will be an "A plus H" mode listing, beginning with
Hong Kong (H) shares being offered before the end
of May, and A shares offered on the Shanghai
bourse not long after. (Feb 8, '06)
HK to scrap offshore funds
tax
A
Hong Kong official has expressed the hope that the
Revenue (Profits Tax Exemption for Offshore Funds)
Bill, intended to attract more overseas investors
to Hong Kong, will be endorsed early this year.
(Feb 2, '06)
China's B-share
no-brainer
It seems likely that
B-shares, set up in the early 1990s to make
Chinese shares available to foreigners, will be
phased out soon. Ironically, rumors of their
demise have greatly increased the level of
activity in the formerly moribund B-share market.
- Mark A DeWeaver
(Feb 1,
'06)
Beijing booms in 2005:
Report
The year 2005 was another
boom year for China's "northern capital", Beijing.
Double-digit increases in disposable incomes,
foreign trade, financial services and tourist
arrivals underscored the capital region's
importance in China's overall economy. (Feb 1,
'06)
Domestic demand boost needed:
top banker
China has to accelerate
social security reform in order to reduce
precautionary savings, China's central bank
governor Zhou Xiaochuan said January 26 at the
World Economic Forum in Davos, Switzerland.
(Jan 27, '06)
Mark Mobius, the
emerging-markets nomad
 Few
international fund managers are better known than
Mark Mobius, whose white suits, shaved head and
globetrotting ways have made him familiar to
global investors. In an interview with ATol,
Mobius offered his insights on China vs India and
financial reform, among other topics. - George Zhibin Gu
(Jan 26, '06)
Yuan rate falls, PBoC denies
selling dollars
The yuan ended an upward
trend over the past 10-plus trading days on
January 10, as China's central bank denied that it
is selling off US dollars from its foreign
reserves. At least two PBoC officials denied
dollar sales, but acknowledged that China might
use foreign reserves to buy oil. (Jan 12,
'06)
New year, new
regulations
China will begin 2006 with a
flurry of new regulations, including measures to
ease foreign investment in the country's equity
markets and new import tax policies intended to
promote domestic innovation. Also, measures to
regulate international trade in staple products
will be continued. (Jan 11, '06)
CNOOC shareholders veto
takeover proposal
Shareholders of CNOOC,
China's third-largest oil company, have blocked a
proposal for the state-owned parent to lead
overseas acquisitions, defending their influence
over the group's expansion strategy. (Jan 5,
'06)
SPEAKING FREELY
The yuan, six months later
Half a
year after China's snap revaluation of the
yuan, analysts are assessing what the new
currency regime portends for the yuan-dollar rate
in the coming year. They don't all agree, except
that yuan hawks in the US are likely to be
disappointed. - Huw
McKay (Dec 20, '05)
Christmas bulls boost Hong
Kong IPOs
China still depends on Hong Kong to
attract serious capital - as the excitement over a
year-end spate of initial public offerings in the
SAR shows. The market debuts included property
developer Agile, clothing retailer China Ting, and
electronics firm Wasion Meters. (Dec 15,
'05)
Shanghai exchange adjusts
index
The Shanghai Stock
Exchange announced on December 12 adjustments to
the constituents of its 180 Index, 50 Index and
Dividend Index. The adjustments will take effect
on the first trading day of 2006. (Dec 13,
'05)
Shenzhen bourse puts warrants
on hold
In the wake of extreme
speculation on the warrants listed on the Shanghai Stock
Exchange - in recent days, the transaction value
of the three warrants quoted on the bourse has
equaled the total of all stocks listed on the
Shanghai and Shenzhen exchanges - the Shenzhen
Stock Exchange said December 6 that it would delay
introducing warrants. (Dec 9, '05)
Bond market expands
rapidly
The Chinese bond market has
been expanding rapidly, soaring 70.47%
year-on-year in the first 10 months. Besides
the central bank itself, bond issuers
included commercial banks, international
development institutions and various other
enterprises. (Dec 8, '05)
Central bank launches swap
operations
China's central bank, the
People's Bank of China, has launched a currency
swap operation with state-owned banks, similar to
an open-market operation, in an attempt to
ease the pressure on the yuan. (Dec 1,
'05)
Anger at US inaction on the
yuan
The decision by the Bush
administration not to name China as a "currency
manipulator" has disappointed industry and labor
groups in the US, who say they will resort to
international institutions and the US Congress for
tougher action. (Nov 30, '05)
US dollar falls below 8
yuan
The
number of Chinese yuan purchased by one US dollar
fell to 7.9997 on November 25, dropping below 8
yuan per dollar for the first time since China's
foreign exchange rate reforms of this summer,
sources at the Bank of China said. (Nov 29,
'05)
More yuan appreciation called
"megatrend"
Wu Xiaoling, vice governor of
China's central bank, has called further
appreciation of the yuan a "megatrend" for the
future, but said many uncertainties exist along
the way, with a "zigzag" appreciation more likely
than a steady rise. (Oct 27,
'05)
US badgers China over
economic differences
The Bush administration,
worried that the US Congress is moving towards a
confrontation with China over trade, has increased
its pressure on China to adopt various economic
reforms, including further yuan revaluation and
boosting IPR protections. A major concern for the
administration is China's growing importance to US
companies. (Oct 25, '05)
CCB's Hong Kong listing
raises US$8 billion
China's largest property
lender, the China Construction Bank (CCB), raised
US$8 billion October 20 in the world's largest
initial public offering (IPO) in four years, after
it priced its shares at HK$2.35 apiece, close to
the top end of the indicative range. (Oct 21,
'05)
China Construction Bank to
launch IPO
In a major watershed for
China's financial reform efforts, mainland
newspapers are reporting that the China
Construction Bank, one of China's "big four"
state-owned banks, will be publicly listed on the
Hong Kong stock exchange on October 27. The IPO is
expected to be the biggest ever for any Chinese
enterprise. (Oct 12, '05)
2% revaluation not enough:
economist
An economist from an
international think tank has argued that the 2%
revaluation of China's currency in July was not
sufficient and urged one of the world's
fastest-growing economies to take further steps.
(Oct 13, '05)
Taiwan studying trial
NT$-yuan exchange
Taiwan-China currency
exchange services that began this week on Kinmen
and Matsu islands on a trial basis have gained a
warm public response, and the government will
further study the issue to better serve the
people, Taiwan Premier Frank Hsieh said recently.
(Oct 7, '05)
China sees bright
futures
Chinese authorities are
considering the introduction of index futures and
other derivative products, now that financial
changes have accelerated with split-share reforms
and the unpegging of the yuan from the dollar. The
Chicago Mercantile Exchange wants some of the
action. (Oct 3, '05)
Bands on the run: China's
forex policy
The Chinese central bank sold
last Friday's non-US dollar band-widening as an
incremental change in favor of flexibility. In
reality, it was an attempt to avert a potential
crisis caused by the shortcomings of the July 21
currency regime, which could have required the
bank to conduct unfeasible transactions in third
currencies. - Huw
McKay (Sep 27, '05)
China, inflation and the
yuan
At the recent Shenyang Summit
in northeast China, attended by key officials and
business leaders, topics ranged from bank reform,
to oil, to foreign exchange policy. The conference
provided useful insights into how China's growth
affects global inflation, especially in the US. -
Axel Merk (Sep 27,
'05)
China eases non-dollar float
rate
The People's Bank of China
has widened the float range of the Chinese yuan
against non-US dollar currencies, from 1.5% to 3%.
It said the yuan-dollar float range would remain
at 0.3%, despite renewed calls from the US and
Japan for further revaluation of the yuan. (Sep 26,
'05)
Yuan rate edges up; no
revaluation planned
The value of China's currency
relative to the US dollar has been edging up
slightly, increasing from 8.11 yuan per dollar
after the July 21 revaluation to 8.0887 yesterday.
But PBoC official Yi Gang affirmed September |
