China Economic Scan - Your daily update on the Chinese economy.
In this edition: First GEB (aka "Chinese Nasdaq") listings expected in August, Chinese cargo throughput down 1.9% in April, PetroChina needs $22 billion financing, Institutional investors held 54.6% of market at end of 2008, Chinese stock indexes close up 1-2%.
Top 5 headlines
- The first listing on China's new Growth Enterprise Board (GEB), is expected in August, with 18 tech-related companies based in Zhongguancun set to list.
- CSRC prescribed listing rules for the GEB include; requiring that the issuer breaks even for the 2 most recent consecutive years with combined profits of at least 10 million yuan ($1.5 million). If not, issuers must have profits of at least 5 million yuan ($0.7 million) for the most recent year on revenues of at least 50 million yuan ($7.3 million), plus an annual revenue growth of at least 30% in the recent 2 years.
- Companies are also required to have net assets of at least 20 million yuan ($2.9 million), and ideally operate for more than 3 years.
China's cargo throughput likely to fall 1.9 pct in April
- Cargo throughput at main ports across China was estimated to reach 500 million tonnes in April, down 1.9% from a year earlier - Ministry of Transport (MOT). The breakdown was 340 million tonnes as domestic trade, and 160 million tonnes as foreign trade.
- Daily throughput was expected to be 3.2 percentage points higher when compared with March.
- Estimation showed sea borne container throughput at main ports in China would be 9.2 million containers, presenting a 13.4% drop from a year earlier.
PetroChina Needs as Much as $22 Billion in Financing
- PetroChina, the world's second largest company by market value, said it may need as much as 150 billion yuan (US$22 billion) in funds during 2009 to boost cash flow and maintain CAPEX and dividends.
- PetroChina raised 50 billion yuan through bank borrowings and a bond issue in Q1 and is seeking shareholder approval for another 100 billion yuan.
- Free cash flow fell 76.9 billion yuan in 2008 because of taxes and investments. PetroChine intends to spend 233 billion in 2009 on acquisitions and upgrades.
Institutional investors become major stock market force
- Statistics from China Securities Depository and Clearing Corp indicated that at the end of last year, institutional investors held 54.62% of the market value of all tradable A shares, up 5.91 percentage points from a year earlier.
- Stock values held by individual investors accounted for an overwhelming 69.87% at the end of 2005.
- Institutional investors in China's capital markets mainly include mutual funds, social security funds, qualified foreign institutional investors (QFII), corporate annuity funds, brokerage firms, companies and organizations.
Hong Kong Stocks Advance for Fifth Day; HSBC Leads Banks Higher
- Chinese stocks were up on all accounts with the Hang Seng Index up +2.46% to 16,835 Shanghai Composite edging up +0.98% to 2,593 Shenzhen Component closing above 10,000, having risen +2.02% to 10,149.
- HSBC +6.3% to HK$61.60. Hang Seng Bank +10% to HK$98.85. Standard Chartered +7.4% to HK$141 saying it will post pretax profit of $248 million in Q2 from bonds it bought back or exchanged at a discount. Macquarie raised its share-price estimate to HK$147 from HK$97.
- Citic Pacific -2.4% to HK$12.88. The company’s former Chairman Larry Yung is seeking to raise as much as HK$732 million ($94 million) selling 60 million Citic shares at HK$11.95 to HK$12.20. Li & Fung +1.4% to HK$22.35. The company is working on “plenty” of possible deals in the U.S. Company President Bruce Rockowitz said.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 16,835 | 404.49 | 2.46% |
| Shanghai Composite | 2,593 | 25.18 | 0.98% |
| Shenzhen Component | 10,149 | 201.26 | 2.02% |
| TAIEX | 6,567 | 186.76 | 2.93% |
| CNY/USD | 6.8226 | -0.0009 | -0.01% |
Source: China Economic Scan
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