Showing posts with label KKR. Show all posts
Showing posts with label KKR. Show all posts

Monday, June 15, 2009

16 June 2009 | China Economic Scan

16-June-2009

China Economic Scan - Your daily update on the Chinese economy.

In this edition: Foreign direct investment fell 17.8% in May, Home sales on the rise in China, KKR said to pay $150m for China Modern Dairy stake, VC deals showing signs of life in China, Chinese stocks gain for first time in three days.

Top 5 headlines

Foreign Direct Investment in China Tumbles on Crisis

  • Foreign direct investment in China fell for an eighth month from a year earlier as companies cut spending to weather the worst economic slump since the Great Depression.
  • Investment slid 17.8% in May to $6.38 billion, the commerce ministry said at a briefing in Beijing today, after falling 22.5% in April.
  • “Companies have just been trying to survive the crisis, I don’t think they’re in the mood for aggressive overseas expansion,” said Wang Qing, chief Asia economist for Morgan Stanley in Hong Kong. “It’s too soon to see a pick-up.”

Home sales rise, but pricing remains crucial

  • According to DTZ, an international real estate consulting company, total floor space of new homes sold nationwide increased 18.6% year-on-year to 162 million sq m in the first four months this year, which was also 21.2% above the year-on-year average of 2006 to 2008.
  • Analysts say the strong rebound was triggered by the government's favorable policies on interest rates and taxation, and pent-up demand from 2008.
  • Statistics from the National Development and Reform Commission show that property prices in China's 70 largest cities climbed 0.4% in April, 0.2% higher than the previous month.

KKR Said to Pay $150 Million for Stake in China’s Modern Dairy

  • KKR, the private equity company of Henry Kravis and George Roberts, invested $150 million in Chinese milk supplier Ma Anshan Modern Farming, two people familiar with the matter said.
  • KKR completed a series of investments in the company, known as Modern Dairy, the New York-based firm said today, without providing financial details.
  • The milk supplier, based in Anhui province, has about 40,000 dairy cows and produces more than 150,000 tons of raw milk a year, KKR said.

VC deals showing renewed signs of life

  • Twenty-six venture capital (VC) and private equity (PE) companies invested $4.81 billion in 15 deals in May after a cautious April that registered only $156 million in total investment, the report said.
  • The financial services industry attracted by far the most investment in May, some $4.64 billion, or fully 97%, of the total.
  • It was one big deal in the finance sector that dramatically changed the investment mix toward financials. On May 12, PE funds led by Hopu Investment Management invested about $4.62 billion to buy 8.53 billion H shares of China Construction Bank.

China’s Stocks Gain for First Time in Three Days; Banks Rally

  • The Shanghai Composite Index gained 1.7% to 2,789.55 at the close, erasing a loss of as much as 0.6%. The CSI 300 Index, which tracks shares on both the Shanghai and Shenzhen exchanges, added 2.1%, with financial stocks posting the biggest gain among the 10 industry groups.
  • Industrial & Commercial Bank, the world’s largest bank by market value, advanced 5.3% to 4.94 yuan, the most since March 26. Bank of China Ltd. climbed 4.8% to 4.12 yuan.
  • The restarting of public offerings after a nine-month suspension may allow as many as 32 companies to raise up to 70 billion yuan ($10.2 billion), according to estimates from Liang Jing at Guotai Junan Securities Co. Some companies may receive final approval for initial public offerings this week, China Business News reported today.

Financial Indicators:

Metric Value Point change % change
Hang Seng Index 18,499 -390.72 -2.07%
Shanghai Composite 2,790 45.79 1.67%
Shenzhen Component 10,769 244.83 2.33%
TAIEX 6,226 -222.67 -3.45%
CNY/USD 6.8410 0.0059 0.09%

Source: China Economic Scan

Wednesday, May 27, 2009

28 May 2009 | China Economic Scan

28-May-2009

China Economic Scan - Your daily update on the Chinese economy.

In this edition: China urges local governments to spend stimulus money, China organises industry purchasing tours of Taiwan, Bain said to lead KKR in bid for 20% of Gome, China Construction Bank rises after Huijin increases holding, Hong Kong stocks rise over 5% on Wednesday.

Top 5 headlines

Local govts urged to provide stimulus money on time

  • China has urged its local governments to cough up funds to ensure major projects in its 4-trillion-yuan ($586 billion) stimulus plan could be completed on time.
  • It is estimated that local governments need to raise 170 billion yuan to match the central government's first two batches of investment of 230 billion yuan, Zhang Shaochun, vice-minister of finance, told four specialized committees of the National People's Congress yesterday.
  • Zhang's statement comes close on the heels of a National Audit Office report, which found that "only 48% of the funds local governments had to contribute for 335 projects are in place".

Chinese mainland organizes industry purchasing tours of Taiwan

  • The Chinese mainland has organized schedules for industry purchasing groups to Taiwan from May to September, to help develop the island economy during global financial crisis.
  • "The preparations are underway and we plan to convene seven to nine purchasing groups in next five months," said Yang Yi, spokesman of the State Council Taiwan Affairs Office at a press conference Wednesday.
  • He said the China Video Industry Association would organize a visit of leading mainland TV producers on June 1 with planned procurement of about US$2.2 billion.

Bain Said to Lead KKR in Bid for 20% of China’s Gome

  • Bain Capital may buy as much as 20% of Gome Electrical Appliances Holdings, China’s second-largest electronics retailer, four people familiar with the discussions said.
  • Bain may pay about $500 million for the stake, two of the people said, asking not to be identified because the talks are confidential. Bain is competing for Beijing-based Gome with KKR & Co. and Warburg Pincus, the people said.
  • Gome’s more than 800 stores in at least 160 Chinese cities make it an attractive target for investors faced with stagnant economies in the U.S., Europe and Japan. KKR and TPG Inc. are among private-equity firms that have sought stakes in companies tied to domestic consumption growth in the past year.

China Construction Bank Rises After Huijin Boosts Stake

  • China Construction Bank, the world’s third-largest lender by market value, rose in Hong Kong trading after the company’s largest government shareholder raised its stake and promised to buy more shares.
  • The Beijing-based company has acquired about 57.8 million Shanghai-traded shares of Construction Bank over the past six months at a price range between 3.71 yuan and 4.18 yuan a share, according to yesterday’s statement.
  • Construction Bank rose +1.9% to HK$4.88 as of 10:22 a.m. in Hong Kong and was up +0.7% to 4.49 yuan in Shanghai.

Hong Kong’s Stocks Surge to Seven-Month High; Li & Fung Rises

  • Chinese stocks surged on Wednesday, the Shenzhen Component rose +1.05% to 10,128, the Shanghai Composite jumped +1.71% to 2,633, and the Hang Seng surged +5.26% to 17,885.
  • Henderson Land Development Co., a Hong Kong-based developer controlled by billionaire Lee Shau-kee, gained +7.7%.
  • Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc. and Target Corp., jumped +11% after U.S. consumer confidence climbed the most in six years. PetroChina, the nation’s largest oil producer, added +5.8% after oil prices rose.

Financial Indicators:

Metric Value Point change % change
Hang Seng Index 17,885 893.71 5.26%
Shanghai Composite 2,633 44.35 1.71%
Shenzhen Component 10,128 105.62 1.05%
TAIEX 6,890 207.33 3.10%
CNY/USD 6.8310 -0.0025 -0.04%

Source: China Economic Scan