China Economic Scan - Your daily update on the Chinese economy.
In this edition: China East Star Airlines gets offer from investors, Wuhan steel to invest $400m in Brazil ore assets, CapitaLand Retail says Chinese land too expensive, Gome shares jump on Bain investment, Chinese stocks fall on Tuesday.
Top 5 headlines
China East Star Airlines gets offer from investors
- East Star Airlines, a debt-ridden privately held Chinese carrier, said it will sell at least an 85 percent stake in the firm to help it make a comeback.
- East Star will get at least 500 million yuan ($73.2 million) from outside investors, led by little known Shanghai Yujie Industry Co, the company said in a statement late on Monday. No timetable or details of other investors were available.
- The small carrier has filed for bankruptcy protection with a local court in Wuhan, its home base. It has total debt of more than 500 million yuan, Wu Yue, a lawyer hired by the company, told reporters at a news conference.
Wuhan Steel May Add to $400 Million Brazilian Ore Investment
- Wuhan Iron & Steel Group, offering $400 million to buy Brazilian iron ore assets, will seek other investment opportunities in countries including Australia to meet its rising demand for the steelmaking material.
- China’s third-largest steelmaker is seeking partners that are “honest and faithful,” spokesman Bai Fang said today. “It doesn’t matter whether our target is a big miner or not,” he said.
- Wuhan Steel offered to buy a stake in MMX Mineracao e Metalicos SA and a unit for $400 million, Rio de Janeiro-based MMX said yesterday. China may spend more than $500 billion on foreign resource investments over the next eight years, according to Deloitte Touche Tohmatsu.
CapitaLand Retail Delays Land Acquisitions in China
- CapitaLand Retail Ltd. said China land remains too expensive for it to make acquisitions and the unit of Southeast Asia’s biggest developer will instead focus on completing its shopping mall projects in the country.
- “I don’t think it’s the right time” to buy more land for retail projects in China, Lim Beng Chee, chief executive officer of CapitaLand Ltd.’s retail unit, said in an interview.
- Hong Kong’s Hang Lung Properties Ltd. and Shimao Property Holdings Ltd. resumed land purchases in China this year as home prices rise in the world’s third-biggest economy. CapitaLand Retail operates 29 malls in China, and plans to open 29 more in the next three years, Lim said yesterday in Singapore.
Gome shares jump 70 percent on Bain investment
- Shares of Gome Electrical Appliances, China's leading home appliance chain, jumped nearly 70 percent Tuesday after announcing an investment from U.S. private equity firm Bain Capital.
- The shares surged 69 percent to 1.9 Hong Kong dollars (24.5 cents) in their first day of trade since being suspended in November amid a corruption investigation centered on the company's tycoon founder.
- Gome said Monday it plans to raise at least $417 million by issuing convertible bonds to Bain and selling new stock to existing shareholders.
China shares fall on worries about world economy
- Chinese shares snapped a four-day rally and fell slightly Tuesday on worries about the world economy, but banking and steel stocks gained.
- PetroChina Ltd., Asia's biggest oil and gas producer, shed 2.5 percent to 13.88 yuan, while China Petroleum & Chemical Corporation lost 2 percent to 10.31 yuan.
- China Shenhua Energy Ltd., the country's biggest coal producer, declined by 3.1 percent to 26.57 yuan, while Pingdingshan Tianan Coal Mining Co. gave up 3.2 percent to 35.9 yuan.
Financial Indicators:
| Metric | Value | Point change | % change |
| Hang Seng Index | 17,538 | -521.18 | -2.89% |
| Shanghai Composite | 2,893 | -3.6 | -0.12% |
| Shenzhen Component | 11,126 | -65.05 | -0.58% |
| TAIEX | 6,197 | -143.74 | -2.27% |
| CNY/USD | 6.8348 | -0.0004 | -0.01% |
Source: China Economic Scan
