China Economic Scan - Your daily update on the Chinese economy.
In this edition: Hong Kong GDP falls 7.8% in Q1, China said to have IPO backlog of up to 400 companies, China reduces industrial land prices, American Dairy gains market share in China, trading of Chinese stock index futures may come soon.
Top 5 headlines
HK's first quarter GDP down 7.8%
- Hong Kong's GDP for the first quarter of this year fell 7.8% after a 2.6% drop in last year's fourth quarter.
- GDP for 2009 as a whole is now forecast to contract by 5.5 to 6.5% in real terms, down from the forecast decline of 2 to 3% earlier put out in the government budget.
- Positive signs are an expected pick-up in the mainland economy and global stock markets, on the downside is a sharp plunge in global demand and a fall-off in intra-regional exports.
China Has IPO Backlog Up to 400 Companies, Citic Says
- China has 300 to 400 companies waiting to hold initial public offerings (IPO), said Citic Securities Co. Chairman Wang Dongming.
- The nation’s securities regulator plans to set up a new system for pricing IPOs and may “soon” end a moratorium on IPOs, said Fan Fuchun, vice chairman of the China Securities Regulatory Commission.
- “The decision on who to list, how to price the listing should be given to the investment bank, company and investors,” said Wang.
China to lower industrial land prices to boost investment
- China's Ministry of Land and Resources has announced a 30% cut in the minimum purchase price of land for industrial use in order to boost investment.
- The national average industrial land price was 721 yuan per square meter in the first quarter, down 1.08% from the fourth quarter of last year, and down 1.1% year on year, according to the ministry.
- Land prices ranged from 60 yuan ($8.77) per square meter in some counties in northwestern Xinjiang Uygur autonomous region to 840 yuan per square meter in the suburbs of Shanghai.
American Dairy Soars as Sales Triple on Milk Scare
- American Dairy reported Q1 sales of $113.8 million vs $39.1 million last year, gross margins jumped to 64% from 37% in the year-earlier period, on increased sales of infant formula. Milk powder sales rose more than threefold in the quarter.
- Chinese based American Dairy jumped 55% in New York trading on Friday.
- “Our first quarter 2009 sales reflect consumers’ flight to quality at the height of the melamine crisis in China,” said Leng You-Bin, chief executive officer of American Dairy.
- The China Financial Futures Exchange (CFFEX) is likely to receive approval to launch trading in a Shanghai Shenzhen 300 Index future soon, having conducted mock trading for a little under 3 years.
- Trading in the Chinese stock index futures will be limited to investors who have a balance in their margin account of at least 500,000 yuan ($73,313.78); pass a CFFEX test; and have practical experience in the mock trading of stock index futures.
- The Shanghai Shenzhen 300 Index is made up of 179 shares in Shanghai and 121 in Shenzhen. The stocks in the index cover about 60% of the market value in Shanghai and Shenzhen.
