China Economic Scan - Your daily update on the Chinese economy.
In this edition: China car sales hit record in April, Shenzhen stock exchange releases draft rules for GEM, Citic-prudential to list A-shares in 2012, China Merchants Energy to issue 4 bln yuan bond, Chinese stocks rise again - close the week up strongly.
Top 5 headlines
China car sales at record, but automaker profits weak
- China's passenger car sales in April rose 37.4% from a year earlier to a record high of 831,000 units, the country's official industry association said, bolstered by government stimulus measures.
- "A lot of the volume was coming from compact cars and mini vans as buyers for such models could get tax incentives or subsidies. And small cars mean thin margins," said Chen Qiaoning, an analyst with ABN AMRO TEDA Fund Management.
- "Beijing's stimulus policies are having a longer-lasting effect than expected," said Qin Xuwen, an analyst with Orient Securities. "As long as volume continues to grow, which is quite likely given the records in March and April, and there is no sudden spike in commodity prices, bottom lines of automakers will improve this year."
China Exch Releases Draft Listing Rules For Nasdaq-Style Mkt
- The Shenzhen Stock Exchange issued Friday draft listing rules for the Growth Enterprise Market, taking a major step toward launching the country's first Nasdaq-style stock market.
- SZSE published an 111 page long public consultation document. Highlights of the draft rules include a lower threshold for delisting compared with stocks trading on the main boards of the exchanges in both Shanghai and Shenzhen.
- There has been speculation among analysts and investors that the GEM, a marketplace tasked to nurture cash-hungry innovation-driven startup firms, could be launched as early as June.
CITIC-Prudential Life Insurance mulls A-share listing in 2012
- CITIC-Prudential Life Insurance Co Ltd, a joint venture (JV) equally-owned by state-owed China's CITIC Group and Prudential Plc of Britain, intends to launch an A-share listing in 2012.
- CITIC-Prudential has been posting losses since its establishment in October 2000. As of the end of last year, it might have registered a net loss of about RMB 200 million.
- Citic Prudential earned Q1 premium income of RMB 220 million, achieving 90% of its target for the period. At the beginning of this year, the company set a goal of RMB 1.3 billion, 30% more than RMB 1 billion it realized in 2008.
China Merchants Energy to issue 4 bln yuan bond
- The parent of China Merchants Energy Shipping Co said on Friday it will issue 4 billion yuan ($586.5 million) of 10-year corporate bonds from May 8 to 14.
- The bonds will pay a coupon of 4.35%, which was derived from a spread over the one-year Shanghai Interbank Offered Rate (SHIBOR), and are rated AAA by China Chengxin Ratings Agency.
- Proceeds will be used for container terminal construction projects in Shenzhen, Ningbo and Qingdao.
China’s Stocks Rise for Seventh Day; China Cosco Advances
- Chinese stocks rose again, finishing the week up. The Hang Seng closed Friday up 1% at 17,390, the Shanghai Composite up 1.09% to 2,626, and Shenzhen Component up 0.73% to 10,183.
- China Cosco +3.9% to 13.32 yuan. China Shipping +1.1% to 14.11 yuan. The Baltic Dry Index +6.3% to 2,194 points yesterday, according to the Baltic Exchange. “Shipping rates are likely to continue to rebound as lots of infrastructure projects will start now and increase the demand for commodities,” said Zhang Xiuqi, a strategist at Guotai Junan Securities.
- Vanke +7.9% to 9.84 yuan. Shenzhen Airport +5.8% to 7.09 yuan. COFCO Property, the property unit of the country’s biggest grain trader, +10% to 7.68 yuan.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 17,390 | 171.98 | 1.00% |
| Shanghai Composite | 2,626 | 28.2 | 1.09% |
| Shenzhen Component | 10,183 | 74.12 | 0.73% |
| TAIEX | 6,584 | 11.00 | 0.17% |
| CNY/USD | 6.8265 | 0.0002 | 0.00% |
Source: China Economic Scan
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