China Economic Scan Weekly Debt Market Review – 31 May 2009

China Economic Scan Weekly Debt Market Review – 31 May 2009

31/05/2009. Source: China Economic Scan. Callum Thomas, Managing Director, China Economic Scan

The CSI Enterprise Bond Index started on Monday at 118 even, and dipped down to lows of 117.60, before closing the trading week up at 118.10 on Wednesday. The Shenzhen Corporate Bond Index started the week at 130.77, dropped to a low of 130.47, and rallied to close the short week up at 130.85.

China's Ministry of Finance (MOF) said it would issue 16.9 billion yuan (US$2.48 billion) of 3-year local government bonds on behalf of 4 provinces and municipalities at a fixed annual coupon rate of 1.67%. The amounts were 3.5 billion yuan for Guangxi Zhuang Autonomous Region, 5.6 billion yuan for Beijing city, 4 billion yuan for Shanghai city and 3.8 billion yuan for Henan Province.

Chinese credit rating agency, Dagong Global Credit Rating, one of the first domestic rating agencies in China, announced the launch of its sovereign credit rating standards. It said credit risks will asses a country's political environment, economic power, fiscal status, foreign debt and liquidity, adding that it judges the credit of a sovereign entity on the basis of a comprehensive evaluation of its fiscal strength and foreign reserves.

SOHO China, the biggest property developer in Beijing's Central Business District, said the proceeds from a $359 million 5-year convertible bond issue, with a coupon rate of 3.75% a year, would be earmarked for general corporate purposes and strategic acquisitions. The bonds will be convertible into 476.2 million ordinary shares, accounting for 8.4% of SOHO's enlarged share capital.

China Construction Bank, the world’s 3rd-largest lender by market value, rose in Hong Kong trading after the company’s largest government shareholder raised its stake and promised to buy more shares. The Beijing-based company has acquired about 57.8 million Shanghai-traded shares of Construction Bank over the past 6 months at a price range between 3.71 yuan and 4.18 yuan a share, according to yesterday’s statement.

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