SAFE eases regulations for special economic zonesMay 24, 2013China's State Administration of Foreign Exchange (SAFE) announced that it will ease regulations of foreign currency transactions for firms operating in special economic zones in the country. The simplified regulations now allow companies to take legal profits derived from exports out of the country, as long as they are located in special economic zones. The new rules, which will take effect in June, will also cut down paperwork requirements and reduce the frequency of regulatory checks.
Spring Airlines set to raise USD410m in Shanghai IPOJan 23, 2015
Spring Airlines is poised to raise up to USD410m on its initial public offering (IPO) on the Shanghai Stock Exchange after its stock closed at Rmb26.15 (USD4.20) on its first day of trading. Spring Airlines, China's first budget carrier to list, is offering up to 100 million shares. The company said it aims to use the funds to buy nine new Airbus 320 aircraft and purchase three new flight simulators as it seeks to compete with international budget carriers. Spring Airlines started with an issue price of Rmb18.16 (USD2.92) but the stock price rose to the limit on its first day of trading to close at about USD4.20.
Public funds in China earn USD49bn in profitJan 22, 2015
China's 2,226 public funds managed by 88 fund companies saw combined profits of nearly Rmb300bn (USD49bn) in the final quarter of last year, the highest record in four years. Xinhua reported that the record profit earned by public funds was boosted by China's recent stock market rally. Stock funds saw the biggest profit at Rmb204.7bn (USD33bn), followed by hybrid funds with Rmb46.7bn (USD7.5bn), bond funds with Rmb23.2bn (USD3.7bn) and money funds with Rmb21bn (USD3.3bn), the firms' quarterly reports showed. According to the report, public funds favoured property, finance and electricity shares during the last quarter of 2014.
39 million government workers to get pay hikeJan 22, 2015
The Chinese government will raise the pay of the country's 39 million civil servants and public workers by at least 60% of their base salaries. This was announced by Hu Xiaoyi, vice minister of human resources and social security, at a press conference. Hu did not disclose details of the pay raise, which is part of China's pension plan reform, but said it will cover civil servants and public workers, including doctors and teachers. At the end of 2013, China had nearly 7.2 million civil servants and more than 31.5 million public sector workers. The salary increase could take effect in October.
PBOC gets nod to set up currency trading in SwitzerlandJan 22, 2015
The Swiss National Bank (SNB), Switzerland's central bank, announced that it has signed an agreement with China's central bank, the People's Bank of China, for the setting up of yuan trading in the European nation. The SNB said the agreement will promote the use of the renminbi by enterprises and financial institutions in their transactions. It will also help facilitate investment and bilateral trade, the SNB added. The PBOC, for its part, agreed to extend its pilot scheme for foreign investors in Switzerland to invest directly in renminbi denominated products. The Swiss Association of Bankers hailed the agreement and the quota.
Foreign banks to tap free trade accountsJan 22, 2015
HSBC China and Nanyang Commercial Bank China are the first foreign banks approved to open free trade accounts for their clients in the pilot Shanghai free trade zone. This means the banks are more free to transact money in the Shanghai FTZ. According to HSBC China, it signed contracts with over 30 energy, car, and pharmaceutical firms which aim to utilise the new FT accounts for easier cross-border deals between the FTZ and foreign markets.
Yuan used in almost a quarter of China's overseas paymentsJan 22, 2015
An estimated 25% of China's cross-border payments in 2014 were settled using the official Chinese currency, the yuan or renminbi, according to the People’s Bank of China. About Rmb9.95tr (USD1.6tr) in cross-border payments used the yuan as the central bank promised to boost international use of the country's currency in 2015. Last year, offshore yuan trading on Thomson Reuters trading platforms went up an impressive 350%, while rival platform EBS declared that the yuan was one of its top-five traded currencies in 2014.
Alibaba eyes New China Life Insurance sharesJan 21, 2015
China's e-commerce giant, Alibaba Group Holding Ltd, is reportedly considering to buy shares in state-run New China Life Insurance Co Ltd. Reports said Alibaba will buy shares owned by Central Huijin Investment Ltd, the investment arm of the government and the largest shareholder in New China Life Insurance. Details of the size of the deal were not disclosed and Alibaba has declined to comment on the report. Central Huijin currently holds 31.34% of the state-run insurer and is reportedly selling some of its stake to Alibaba.
Chinese brokers see profit rise in 2014Jan 21, 2015
Chinese brokers saw a 119% profit growth in 2014, triggered by the country's booming stock market, said the Securities Association of China (SAC). The statistics published by SAC showed that Chinese brokers made a combined profit of Rmb96.55bn (USD15.57bn) in 2014 from Rmb44bn in 2013. Of China's 120 registered brokers, only one made a loss, the industry association said. By the end of 2014, Chinese brokerages had doubled their total assets to Rmb4.09tr (USD657bn) from Rmb2.0tr (USD321bn) at end-2013. The figures released by SAC, however, were unaudited.
WeBank starts trial operationJan 19, 2015
WeBank, China's first Internet bank, began trial operations on 18 January but did not accept new account applications on its first day, Xinhua News Agency reported. The report stated that WeBank's trial operations will be limited to opening new accounts for its employees, shareholders and invited individuals. The official operations of Webank are expected to start this March or April. The Tencent-owned Internet bank has a registered capital of Rmb3bn (USD483m). It is among the first batch of five private banks to get approval from the China Banking Regulatory Commission.
Group-buying site Meituan.com gets USD700m in fund raisingJan 19, 2015
Alibaba-backed group-buying site meituan.com has raised USD700m in its new round of fundraising, raising the value of China's leading group-buying site to USD7bn. Meituan.com confirmed the new investments on its official Weibo page, but did not mention the name of the investors. It did not provide any further details other than saying that it had completed a new round of fundraising worth USD700m. In May 2014, meituan.com received a USD300m investment from a group led by General Atlantic, a global private equity firm. Alibaba invested USD50m into the group-buying site in July 2011. The fresh investments give meituan.com a boost as it goes up against competitors, including the Tencent-backed dianping.com and the Baidu-owned muomi.com
Margin-trading crackdown causes Chinese stocks to fallJan 19, 2015
Chinese shares declined on 19 January after the Chinese government restricted margin trading, a move which analysts see is a sign that regulators are now more concerned with this particular risky form of investment. In margin trading, investors borrow funds so they can purchase stocks. Shanghai shares declined 5.75% in early trading after the country's securities agency stopped Guotai Jun’an Securities Co, Haitong Securities Co, and Citic Securities Co from opening new margin trading accounts for clients for 90 days. Their Hong Kong-listed shares then fell 5.6%, 11.3% and 12.7%, respectively. The Chinese regulator conducted a spot check and found out that the three brokerages had rolled over margin-trading contracts for a large number of clients.
China sees USD2.4bn equities outflow in the third week of 2015Jan 16, 2015
A total of USD2.5bn emerging Asia funds were taken out by investors in the week to 15 January, with the bulk of the outflows registered in China. The Financial Times reported that equity outflows in emerging Asia soared to USD2.4bn from USD300m the week before but bond outflows slowed to USD121m from last week's USD399m. According to ANZ analysts, China registered equities outflows of USD2.1bn during the week. EPFR said this week's outflow was significantly higher than the USD600m taken out by investors in the first week of 2015. The biggest recipient of inflows, an ANZ analyst said, was Korea, although the amount was small at USD68m.
China to launch USD6.5bn venture capital fundJan 15, 2015
China's State Council announced that the government will set up a Rmb40bn (USD6.5bn) venture capital fund that will support fledging start-ups in emerging industries. In a statement, China's cabinet said the state venture capital investment guidance fund will help breed and foster sunrise industries and help promote the country's economy. The State Council did not give a timetable but Reuters reported that the said fund could be established within a few weeks. In the first six months of 2014, only 83 new funds were set up in China's venture capital market. The country's venture capital market remains small.
Singapore's DBS to set up consumer finance firm in ChinaJan 15, 2015
Singapore's biggest bank, DBS Group Holdings Ltd, is teaming up with Postal Savings Bank of China and five other firms to set up a consumer finance company in the country. DBS said one of its units will invest up to Rmb120m (USD19.4m) to set up the said company in China. The company will be called China Post Consumer Finance Co and the Singapore bank will become its second-largest and only foreign shareholder. No timetable was disclosed for the setting up of the consumer finance company and Reuters said the establishment of the firm will not have material impact on DBS's financial position for the fiscal year ending 31 December.
Chinese banks’ new yuan lending hits record high in 2014Jan 15, 2015China’s new yuan-denominated lending last year reached a record high of Rmb9.78tr (USD1.58tr), an increase of Rmb890bn year-on-year. In December, the country's new lending reached Rmb697.3bn (USD112.61bn), up Rmb214.9bn (USD34.70bn) from December 2013, according to data that the People's Bank of China released. M2, a measure of money supplycovering cash in circulation and all deposits, went up 12.2% year-on-year to Rmb122.84tr (USD19.84tr) as of the end of December.
Foreign banks in China see better performanceJan 14, 2015
Despite China's economic slowdown and a slew of challenges, foreign banks in the country are optimistic that their financial performance will improve significantly over the next three years in the country. A survey conducted by accounting firm Erns& Young showed that 18 foreign banks are optimistic about their future performance in China, up from seven foreign banks in the previous survey. Their optimism was based on China's financial reform process, which is expected to provide growth opportunities for financial institutions. Foreign banks take up just 1.73% of total banking assets in China by the end of 2013.
Wanda trims IPO fundraising targetJan 13, 2015Wanda Cinema Line Corp, the biggest movie theatre operator in China, has scaled back its original listing plan and now seeks to raise Rmb1.26bn (USD203.26m) through an IPO at the Shenzhen stock exchange. Wanda had planned to raise up to Rmb2bn (USD322m) through the Shenzhen listing but decided to aim for a lower fundraising target, following guidance from the China Securities Regulatory Commission. Wanda Cinema Line, controlled by Dalian Wanda Commercial Properties Co Chairman Wang Jianlin, is now seeking about Rmb21 a share for the 60 million shares it will offer.
Li Ka-shing is again the wealthiest person in AsiaJan 13, 2015Hong Kong-based tycoon Li Ka-shing is most likely to reclaim his title as the richest individual in Asia as the shares of his flagship firm, Cheung Kong Holdings Ltd, went up to their highest level in 17 years with a looming USD24bn reorganisation scheme. Li, 86, reportedly has USD30.8bn in assets based on the trading of his shares. This makes Li about USD3bn richer than mainland China's Jack Ma, founder and chairman of Alibaba Group Holding Ltd, whose personal fortune was estimated at USD28.2bn as of 9 January.
Beijing's Hony Capital cancels restaurant acquisitionJan 13, 2015Chinese private equity firm Hony Capital has reportedly cancelled a plan to acquire 93.2% stake of Chongqing Cygnet Hotpot, a Chinese restaurant chain, for an undisclosed amount. He Yongzhi, chairman of Chongqing Cygnet, said there were irreconcilable differences in management style, prompting the calling off of the acquisition. The acquisition plan was announced in November 2014 and both Hony Capital and Chongqing Cygnet said they want to develop the business to a bigger and better scale. Hony has not issued a statement yet. The Beijing-based PE firm acquired British food brand Pizza Express for USD1.2bn in July 2014.
Shanghai Stock Exchange to begin stock options tradingJan 12, 2015Investors will soon be able to trade options on an exchange-traded fund (ETF) in the Shanghai Stock Exchange (SSE), the China Securities Regulatory Commission (CSRC) announced. This as the SSE is scheduled to start a stock options trial programme on 9 February on an ETF that tracks the 50 biggest yuan-denominated stocks in the bourse. The CSRC said the stock options trading will be opened to institutional investors that have an aggregate balance of at least Rmb1m (USD160,000) in their securities and cash accounts. Individual investors must have aggregate balance of Rmb500,000 (USD80,000). The stock options will cover ETFs and selected listed stocks.
Stock exchanges gain in first week of 2015Jan 12, 2015The benchmark Shanghai Composite Index and the Shenzhen Component Index registered gains of 1.63% and 2.82%, respectively, on the first week of 2015. Total turnover of the two exchanges was Rmb702.68bn (USD113.24bn). ChiNext Index, China's NASDAQ-style board for high-tech and fast-growing start-ups, also gained 5.54% on the first week of the year from a week earlier, while the CSI 300 Index of the biggest companies traded on the Shanghai and Shenzhen bourses gained 0.42% week-on-week.
China's online tax laws could be finalised this yearJan 9, 2015
Local media reported that China's first tax law that will govern online transactions in the country could be finalised by the end of this year. This after implementing rules and regulations for the online tax laws have been included in a draft for the amendment of China's tax laws. According to the draft, individuals or groups that engage in online businesses should place their tax registration information on a clearly visible area of their websites. Another article of the said draft said government tax agencies must be provided with tax registration information by online transaction platforms. China currently does not enforce taxes on online transactions.
China seeks to intensify tax collection on overseas ChineseJan 9, 2015
China's tax officials are now demanding Chinese citizens doing business overseas to report their earnings outside of China. The regulation that imposes taxes on income derived from overseas businesses has long been ignored but tax agencies are now quietly beginning to enforce the law. This after the authorities found out that the level of compliance among Chinese nationals overseas has been relatively low. CNBC reported that the State Administration of Taxation have started a separate campaign to curb tax evasion by Chinese companies making overseas investments. Starting 1 February, a new rule will ban a range of international investments deemed to be tax shelters.
China's Kaisa Group may default on offshore bondsJan 9, 2015
Shenzhen-based property developer Kaisa Group Holdings Ltd might be the very first property firm in China to default on offshore bonds. The company reportedly missed interest payments on a USD500m debt held by overseas investors, managers of funds holding the bonds were quoted as saying. Analysts said that even though Kaisa has 30 days after the due date to pay the interest, missing the deadline would put the company in technical default. Kaisa was seen to be financially stable with a net profit in H1 2014 going up 30% year-on-year to Rmb1.33bn (USD214m), with revenue of Rmb6.79bn (USD1.09bn).