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April
17-April-2009
China Financial Scan - Updates on the Chinese financial
markets
In this edition: Special report on China's economy (GDP up
6.1%), China Zhong Wang to IPO in Hong Kong, China central bank to
sell 75 bln yuan 3-mth bills, Banyan Tree raises funds to invest in
China, PICC says AIG wont sell its holding, Citi China sees 95%
profit jump, Eastern Airlines cuts costs in response to last year's
losses, Chinese stocks fall slightly.
Top 8 headlines
SPECIAL:
National
Economy: Positive Changes Emerged in the First Quarter of 2009
- National Bureau of Statistics official release: "the
gross domestic product (GDP) of China in the first
quarter of this year was 6,574.5 billion yuan, a year-on-year
increase of 6.1%, which was 4.5 percentage points lower
than that in the same period last year."
- Agriculture: expected planting area for grain to reach 108.14m
hectares (summer grain +1.27% to 27.16m hectares; autumn crops
+1.16% to 75.12m hectares), output of pork, beef and mutton +6%
to 16.15 million tons.
- Industrial production: total value added by industrial
enterprises was up 5.1% year on year (higher in march at 8.3%
than 3.8% than the first two months); growth of heavy industry
was 4.5%, 6.8% for light industry.
- Fixed asset investment: Q1 fixed asset investment grew 28.8%
YoY to 2,812.9 billion yuan.
- Retail sales: Q1 retail sales rose 15% to 2,939.8
billion yuan (real growth of 15.9%); top gainers were furniture
+24.1%, construction/decoration materials +20.2%, vehicles
+11.1%.
- CPI: Q1 Consumer Price Index down, -0.6% QoQ, -1.2%
YoY.
- Foreign trade: total value of imports and exports in Q1 down
-24.9% to US$428.7 billion; exports US$245.5 billion -19.7%,
imports US$183.2 billion -30.9%; trade surplus US$62.3
billion. FDI (foreign direct investment) was down 20.4% to
US$21.8 billion in Q1.
- Employment: in the first two months employment in urban areas
grew by 1.62 million. Per capita disposable income was 4,834
yuan in Q1 YoY growth of 10.2%.
- Money Supply: M2 +25.5% to 53.1 trillion yuan, M1 +17% to 17.7
trillion yuan, M0 +10.9% to 3,374.6 billion yuan. Loans by
financial institutions up 4,581 billion yuan to 34,955 billion
yuan; deposits up 5,616 billion to 52,262 billion yuan.
China
Zhong Wang's $1 billion HK IPO to test appetite
- Zhong Wang will begin its investor marketing road show on
Monday in Hong Kong, with pricing of its shares scheduled for
April 30 and listing targeted for May 8 in a deal to raise
between $700 million and $1 billion, according to a Reuters
report.
- China Zhong Wang, maker of aluminium extrusion products such
as window frames and railcar components, is well positioned as a
Chinese economic recover play. It earned 1.9 billion yuan
(US$278m) in 2008 on revenue of 11.3 billion yuan (versus 852
million on 7.5 billion in 2007).
China
c.bank to sell up to 75 bln yuan 3-mth bills
- China's central bank said on Wednesday that it will auction up
to 75 billion yuan (US$11 billion) of 3-month bills in its open
market operations on Thursday; down from 95 billion yuan last
week.
- On Tuesday the central bank drained 80 billion yuan through
28-day bond repurchase agreements and 60 billion yuan through 91
day repos. 197 billion yuan in central bank bills will mature
this week.
Singapore's
Banyan Tree raises 1st China hotel fund
- Singapore-based Banyan Tree, luxury resort and hotel
developer, completed a $500 million dollar fund (originally
targeting about $700m) according to a Reuters report.
- Banyan Tree apparently plans to develop 5 or 6 hotel projects
across China, and is said to be hiring senior executives and
planning to open an office in Shanghai.
PICC
says AIG has no intention of selling PICC shares
- PICC Property & Casualty, China's top non-life insurer,
sought to reassure the market by saying that Americal
International Group (AIG) has no intention of selling its 9.9%
stake in the company.
- PICC shares fell 6.9% to HK$4.88 at Midday on Thursday, Credit
Suisse downgraded the stock to neutral from outperform after
PICC reported a 98% plunge on its 2008 net profit to 50 million
yuan ($7.3 million) due to higher underwriting losses and lower
investment income.
Citi
China gains net income of 1.3 bln yuan in 2008, 95% up year on year
- Citibank (China) Co announced that its net income reached 1.3
billion yuan (US$190 million) in 2008, up 95%. Its operating
revenue was up 46% to 3.6 billion yuan.
- Citi China increased its yuan lending 17% from 2007; its
capital adequacy ratio reached 13.6% versus 11.5% in 2007. The
bank also opened 6 new consumer outlets in Beijing, Shanghai and
Dalian; bringing its total outlets to 26.
China
Eastern Airlines cuts investment to curb losses
- China Eastern Airlines said it slashed costs and investments
by more than 800 million yuan in the last four months to offset
huge losses (it lost 13.9 billion yuan in 2008).
- Measures it took included cutting aircraft purchases to a
maximum of 13 in 2009 (at least 10 fewer than planned),
suspended 29 investment projects worth 3.15 billion yuan; it
also said it would increase the frequency of profitable
scheduled flights in Shanghai and Kunming. Its stock price was
$17.50, down -4.11% in overnight trading on NYSE.
China’s
Stock Index Falls for First Time in Six Days on Economy
- The Shanghai Composite Index dropped 0.1% to 2,534.13, the
Shenzhen Component fell 0.14% to 9,711.36, and Hong Kong's Hang
Seng fell 0.55% to 15,582.99.
- Shenhua -3.1% (24.63 yuan), China Coal -3.7% (10.81 yuan) - it
cut production by 4.6% in Q1. Datong Coal Industry Co -3% (26.12
yuan), Yunnan Copper -0.6% (22.03 yuan) - it posted a 2008 loss
of 2.79 billion yuan on lower metal prices and writedown of
inventories. China Southern -3.1% (5.98 yuan) - it's rating was
cut to “sell” from “buy” by Deutsche Bank, citing risks
from an uncertain Guangdong province economy and carrier’s
ability to contain costs. China Cosco, +2.5% (13.47 yuan), China
Shipping +1.5% (14.58 yuan).
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