China Economic Scan - Your daily update on the Chinese economy.
In this edition: Chinese rating agency launches sovereign ratings, Dalian futures exchange lists PVC futures contract, Tingyi sees 43% profit rise on noodle and drink sales, Citic Pacific to invest $2.2bln in Steel, Chinese stocks begin the week with a small increase.
Top 5 headlines
China unveils 1st sovereign credit rating standards
- 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.
- Elements of credit risks will include the country's political environment, economic power, fiscal status, foreign debt and liquidity, said the company, adding that it judges the credit of a sovereign entity on the basis of a comprehensive evaluation of its fiscal strength and foreign reserves.
- Compared with other rating agencies, Dagong pays more attention to the different economic stage of each country, and examines the features of its credit risks in a holistic and systematic view, according to Dagong.
China launches PVC futures trading
- China started the trading of polyvinyl chloride (PVC) futures contracts at 9 a.m. at DALIAN Commodity Exchange Monday, the 3rd new futures contract this year after steel and rice.
- The September contract V909 opened 275 yuan higher at 6575 yuan per ton.
- PVC is a kind of synthetic resin widely used in construction, plumbing, electric wires and packaging. China is the world's largest PVC manufacturer, with an annual output of 8.82 million tonnes last year.
Tingyi Posts Record Profit on Noodle, Drinks Sales in China
- Tingyi (Cayman Islands) Holding Corp., China’s biggest maker of packaged food, said profit climbed 43% to a quarterly record on higher instant-noodle and beverage consumption in the world’s third-largest economy.
- Q1 net income rose to $93 million, from $65 million a year earlier. Sales increased 21% to $1.18 billion.
- Instant noodle sales gained 12% to $587.7 million in and beverage sales rose 37% to $525 million, Tingyi said. Finance costs fell to $6.63 million from $9.25 million and the prices of palm oil, sugar and plastics declined, it said.
Citic Pacific to Invest $2.2 Billion in Steel, May Sell Assets
- Citic Pacific, rescued by China after posting the biggest currency derivative loss by a Chinese company, plans to invest 15 billion yuan ($2.2 billion) in its iron ore and steel businesses, and may sell other assets.
- The company in March posted its first annual loss of HK$12.7 billion ($1.6 billion) in almost 2 decades. It bought currency contracts to fund the iron ore mine in Australia, and bets that the Australian dollar would gain incurred losses after the currency tumbled.
- Citic Pacific dropped -0.4% to close at HK$16 in Hong Kong trading. The shares have climbed 69% since the appointment of new Chairman, Chang Zhenming on April 8.
China’s Stocks Rise on Economic Recovery Hope; Haitong Gains
- Chinese stocks rose slightly on Monday, the Hang Seng up +0.35% to 17,122, the Shanghai Composite up +0.48% to 2,610, and the Shenzhen Component up +1.09% to 10,182.
- Haitong Securities, the second-largest listed brokerage by market value, rose +6.3% to 14.33 yuan. Pacific Securities added +8.4% to 16.90 yuan and Sinolink Securities gained +4% to 37.53 yuan.
- China may resume these share sales on the nation’s stock exchanges next month, the Shanghai Securities News reported today. 32 companies are waiting to sell a combined 14.3 billion shares in initial offerings, it said.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 17,122 | 59.3 | 0.35% |
| Shanghai Composite | 2,610 | 12.41 | 0.48% |
| Shenzhen Component | 10,182 | 109.53 | 1.09% |
| TAIEX | 6,734 | -2.83 | -0.04% |
| CNY/USD | 6.8239 | -0.0038 | -0.06% |
Source: China Economic Scan
