China Economic Scan - Your daily update on the Chinese economy.
In this edition: China and Brazil said to have huge trade potential, Macao's property transactions fall 16% in Q1, Chinalco-Rio Tinto deal gets approval from US regulator, Agricultural Bank raises $7.3bln in bond sale, Chinese stocks rise to 9 month high.
Top 5 headlines
China, Brazil have huge trade potential: former ambassador
- Former Chinese ambassador to Brazil, Chen Duqing, said that the two sides have huge potential to expand trade.
- Bilateral trade rose 63.2% year on year to $48.98 billion in 2008, according to data released by the General Administration of Customs.
- Brazil imported $268 million worth of farm produce from China, up 125.2% year on year. Imported goods were mainly soybeans, aquatic and livestock products. China imported vegetable oil, cotton and fruit worth $8.79 billion from Brazil last year, an increase of 82.4% from a year ago.
Macao's property transactions down 16.9% in Q1
- Based on Stamp Duty records, a total of 1,664 building units were sold and purchased in the first quarter of 2009, decreasing by 16.9% over the fourth quarter of last year.
- The total value of property transactions in the period dropped 20.5% quarter-to-quarter to just 2.13 billion patacas (US$270 million).
- 801 units, were residential units, valued at a total of 1.27 billion patacas (US$161 million), decreasing by 37.7% and 41% respectively quarter-to-quarter, the DSEC figure showed.
Chinalco-Rio Tinto deal gets approval from U.S. regulator
- The Committee of Foreign Investment in the United States granted clearance to Rio Tinto regarding the proposed issue of convertible bonds to Aluminum Corp. of China.
- In February, Chinalco signed to invest 19.5 billion U.S. dollars in the iron ore giant Rio Tinto of Australia, the world's third-largest mining company, to secure resource supplies for China and help cut Rio's heavy debt.
- Under terms of the planned deal, Chinalco will invest US$7.2 billion in convertible bonds and US$12.3 billion in Rio Tinto iron ore, copper and aluminum stakes.
Agricultural Bank Raises $7.3 Billion in Bond Sale
- Agricultural Bank of China, raised 50 billion yuan ($7.3 billion) in the nation’s biggest corporate bond sale to boost capital and help pave the way for an initial public offering (IPO).
- The IPO, planned for as early as the second half of this year, would be the biggest by a Chinese lender since 2006 and cap a decade-long reorganization of the banking industry that cost $650 billion.
- Agricultural Bank sold 20 billion yuan of 10-year callable bonds at a coupon rate of 3.3% for the first 5 years and 25 billion yuan of 15-year bonds at 4% for the first 10 years on the nation’s interbank market.
China’s Stocks Rise to Nine-Month High on Stimulus Expectations
- Chinese stocks closed up, arriving at 9 month highs on Tuesday. The Hang Seng rose +3.06% to 17,544, Shanghai Composite +0.90% to 2,677, Shenzhen Component up +1.07% to 10,424.
- “The government is quite determined to get a recovery,” said Philippe Zhang, chief investment officer at AXA SPDB Investment Managers in Shanghai, which oversees about $220 million. “The market is still quite strong.”
- Pudong Bank gained +3.2% to 25.99 yuan, the most since April 29. Shenzhen Bank rose +2.2% to 17.89 yuan. PetroChina gained +1.4% to 13.15 yuan. The company said it will buy 8 gas suppliers from its parent company and issue 26 billion yuan in medium-term notes. Goldman Sachs Group raised its stock rating to “neutral.” China Oilfield Services, an oil driller, rose +1.5% to 16.63 yuan.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 17,544 | 521.12 | 3.06% |
| Shanghai Composite | 2,677 | 23.9 | 0.90% |
| Shenzhen Component | 10,424 | 110.32 | 1.07% |
| TAIEX | 6,656 | 77.78 | 1.18% |
| CNY/USD | 6.8292 | -0.0023 | -0.03% |
Source: China Economic Scan
