China Economic Scan - Your daily update on the Chinese economy.
In this edition: New loans in China to reach 6.5 trillion in H1, Citic says transfer of state held shares a positive move, China refines record level of crude oil May, China Minsheng wins investor approval for Hong Kong share sale, Chinese stocks gain for fourth day.
Top 5 headlines
New loans may reach 6.5t yuan in H1
- China's new yuan loans in the first 20 days in June exceeded that of the same period in May, making it possible that new loans may reach 6.5 trillion yuan ($951 billion) in the first half of 2009.
- According to the source, banks also tend to expand their credit line when the month is ending, which makes it almost certain that new loans in June will exceed that of May and that the 6.5-trillion expectation will come true, considering the current trend for the new loans increase.
- The state council, or the cabinet, slashed the minimum capital requirements for fixed-asset investment projects at the end of last month, lowering the threshold of infrastructure construction projects and increasing the demand for loans.
China’s Transfer of Shares Is Positive, Citic Says
- China’s decision to order companies listed since 2006 to transfer some of their state-held shares to the national pension fund may support the equity market, according to Citic Securities Co.
- The move is “fairly positive,” and the pension fund will act as a stabilizing force for stocks, analysts at the country’s biggest listed brokerage, led by Yu Jun, wrote in a report published today.
- The new rules, announced by the Ministry of Finance on June 19, require the transfer of 8.4 billion state-held shares in 131 listed companies, and the stocks will be barred from trading for another three years after existing lock-up periods expire.
China refines more crude oil in May, hits record high
- China refined a record 31.19 million tonnes of crude oil in May, up 10.7% over the same month last year, according to the China Petroleum and Chemical Industry Association (CPCIA).
- The CPCIA on Monday released figures that showed refined oil output, including gasoline, diesel and kerosene, totaled 19.34 million tonnes, an increase of 16.7% over the same period last year.
- Sales of refined oil topped 18.32 million tonnes in May, up 2.3% from April, with gasoline sales up 2.9% year on year, or 3.6% from April, to hit 5.61 million tonnes.
China Minsheng Wins Investor Approval for Hong Kong Share Sale
- China Minsheng Banking Corp., the nation’s first privately owned lender, won investor approval to revive an initial share sale in Hong Kong after shelving the plan for four years.
- Minsheng Chairman Dong Wenbiao got the go-ahead for the sale at a shareholder meeting today in Beijing, where the bank is based. Minsheng plans to offer stock equivalent to as much as 15% of its enlarged share capital, and may boost the sale by 15% if there’s enough demand.
- UBS AG, Switzerland’s biggest bank by assets, will help manage the stock sale, people familiar with the matter said last week. Minsheng aims to complete the offering by the end of the year barring any “unusual circumstances,” Liu Minwen, director of the capital financing office, told shareholders today.
China’s Stock Index Gains for Fourth Day; ICBC, Ping An Climb
- China’s benchmark stock index rose, led by financial companies, after the Shanghai Securities News said new lending rose and the government required some state- owned companies to transfer stock to the national pension fund.
- Industrial & Commercial Bank of China, the country’s biggest lender, added +3.1%. Ping An Insurance, the nation’s second-largest insurer, gained +3.4% on speculation the requirement will boost its equity investments. Suning Appliance rose +1.4% after saying it plans to sell new shares in a private placement.
- “The confidence and market momentum are still there,” said Yan Ji, who helps oversee about $850 million of investments at HSBC Jintrust Fund Management Co. in Shanghai. “For the national pension fund, it will play a role of stabilizing the market because the fund isn’t unlikely to sell the shares.”
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 18,060 | 138.62 | 0.77% |
| Shanghai Composite | 2,896 | 15.81 | 0.55% |
| Shenzhen Component | 11,191 | -51.58 | -0.46% |
| TAIEX | 6,341 | 110.06 | 1.77% |
| CNY/USD | 6.8352 | -0.0024 | -0.04% |
Source: China Economic Scan
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