China Stock Market Research

Key items expected in Greater China region to September 29:

Tuesday September 23
-Hong Kong-listed CATIC International H1 results
-Hong Kong-listed China Properties H1 results
-Hong Kong-listed AEON Credit H1 results
-Taiwan Aug export orders
-Taiwan Aug industrial output

Wednesday September 24
-Hong Kong’s Kowloon Development H1 results

Thursday September 25
-Hong Kong Aug trade data
-Hong Kong-listed Shimao Property H1 results
-Hong Kong-listed Pou Sheng Q3 to June results
-EU Trade Commissioner Peter Mandelson arrives in Beijing
-Taiwan central bank board meeting
-Taiwan Aug money supply

Friday September 26
-World Economic Forum session opens in Tianjin, China
-Taiwan Aug leading indicators

Saturday September 27
-World Economic Forum session in Tianjin, China

Source: (XFN-ASIA)

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HONG KONG

Share prices closed higher led by China stocks as the Shanghai bourse extended Friday’s 9.5 pct surge after Beijing took more measures to support its markets. Investors also welcomed the US government’s rescue plan for banks, though there are some doubts whether the bailout would end all the problems in the US. The Hang Seng index closed up 304.47 points or 1.58 pct at 19,632.20.

CHINA

China A-shares closed sharply higher, extending Friday’s 9.46 pct surge in the benchmark index, after regulators took further measures to support the markets following the recent global financial turmoil. The benchmark Shanghai Composite Index closed up 161.32 points or 7.77 pct at 2,236.41. The Shanghai A-share Index rose 169.46 points or 7.78 pct to 2,348.57, while the Shenzhen A-share Index added 24.07 points or 3.85 pct to 649.41. China B-shares closed higher on follow-through buying after Friday’s 10 pct gain as mainland regulators moved to make it easier for companies to buy back shares. The Shanghai B-share Index was up 8.60 points or 7.08 pct at 130.20, while the Shenzhen B-share Index rose 3.22 points or 1.03 pct to 314.89.

TAIPEI

Share prices closed sharply higher after the US government unveiled plans to buy up to 700 bln usd of distressed assets from financial institutions in a bid to shore up the credit markets. The market also got a boost from local curbs on short sales. The weighted index closed up 140.22 points or 2.35 pct at 6,110.60.

Source: (XFN-ASIA)

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The China Securities Regulatory Commission (CSRC) said it issued a draft rules yesterday which would remove many of the controls on share buybacks.

According to the draft published on the CSRC’s website, buyback offers would no longer need approval from the CSRC. Instead, upon obtaining shareholder approval for buybacks, a listed company can proceed after making a disclosure and reporting the transaction to the CSRC.

The CSRC will solicit public opinions on the draft rules until Sept 28.

Source: XFN-ASIA

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BEIJING, Sept. 19 (Xinhua) — China stock prices soared 9.06 percent at opening on Friday after the government moved to scrap the stamp tax on stock purchase, effective Friday, in a move to boost the equities market.

The government said late Thursday it would cancel the 0.1-percent stamp tax on purchasing shares while that on share selling remained unchanged at 0.1 percent.

The move came after domestic stocks fell for three consecutive days under the influence of U.S. financial market upheaval.

Also on Thursday, the government’s investment arm — Central Huijin Investment Co., Ltd. — said it would buy shares of three major Chinese lenders on the secondary market to fortify their share prices.

The three lenders, the Industrial and Commercial Bank of China, the Bank of China and the China Construction Bank, had shed heavy losses in the previous three days of trading, as banks were most hit by the spreading crisis on the Wall Street.

The benchmark Shanghai Composite Index opened at 2,067.64 points, up 171.81 points. Nearly all the stocks rose to the daily limit of 10 percent at opening.

The rising momentum was maintained in about an hour after the market opened, with the key index repeatedly hitting new highs in trading. It reached a high of 2,074.31 points before 10:20, up about 9.4 percent.

The market surge also came after the Wall Street rallied on news of a possible government rescue plan to create an entity like the Resolution Trust Corp. to absorb banks’ bad loans.

Boosted by the overnight Wall Street advance, regional markets in Asia mostly opened higher on Friday.

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INVESTORS in China will no longer have to pay a stamp duty when they buy shares, a state initiative to provide a boost to the nation’s flagging stock markets roiled further by global financial turmoil.

From today, investors will pay the 0.1 percent tax only when they sell shares, according to a notice from the Ministry of Finance and the State Administration of Taxation issued late yesterday.

Meanwhile, a government investment arm plans to buy shares in three major state-owned banks to boost their share prices, which have plunged following the announcement that investment bank Lehman Brothers filed for bankruptcy.

Qian Qimin, an analyst at Shenyin Wanguo Securities described the stamp-tax cut as “a major positive” move that should have an immediate upward effect on the market.

“This is a clear signal that the government is acting to stabilize the market, and more measures may follow,” Qian said.

Regulators have used adjustments in stamp-tax duties to help spur or cool demand for stocks. It tripled the tax in May last year which triggered a major slide in the stock market.

The tax on both buying and selling stocks was lowered to 0.1 percent from 0.3 percent in April.

“The government’s intention is clear,” said Song Songxing, a professor at Nanjing University. “As investors no longer have to pay the tax on purchases, this means authorities are encouraging long-term investments.”

In another measure announced after the market closed yesterday, the Central Huijin Investment Co, a unit of the Chinese sovereign wealth fund, will buy equity stakes in three state lenders.

Central Huijin started to buy the shares of the Industrial and Commercial Bank of China, the Bank of China and the China Construction Bank yesterday. The move was to show the government’s interest in the three lenders, to support the steady operation of major state-owned financial institutions and to stabilize their share prices.

“The decision was important for a stable operation of the capital market,” a China Securities Regulatory Commission spokesman told the Xinhua news agency.

Independent analyst Hou Ning remains cautious, saying the weakness in global financial markets may curb the rebound of the two markets on China’s mainland.

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China A-shares finished the morning sharply lower after three more Chinese banks disclosed their exposure to collapsed investment bank Lehman Brothers. Airlines also tumbled on a rebound in crude oil prices.

Financials were under pressure as confidence in the sector collapsed amid reports that more US institutions are seeking mergers to help them weather the credit crisis.

Gold producers were up after gold prices rose dramatically overnight.

The benchmark Shanghai Composite Index ended the morning down 112.61 points or 5.84 pct at 1,816.44.

The Shanghai A-share Index was down 117.99 points or 5.83 pct at 1,907.60, while the Shenzhen A-share Index fell 34.43 points or 5.86 pct to 553.27.

The FTSE/Xinhua China A 50 Index was down 417.92 points or 5.95 pct at 6,607.40 and the FTSE/Xinhua China A 200 Index fell 312.80 points or 5.79 pct to 5,085.61.

(1 usd= 6.8 yuan)

Source: XFN-ASIA

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China B-shares finished the morning session sharply lower, reacting to Wall Street’s over 4 pct tumble after the US government’s takeover of AIG failed to restore confidence in the financial system.

All stocks in the B-share market finished in negative territory, and more than 20 fell by the 10 pct daily limit.

The Shanghai B-share Index fell 10.39 points or 9.01 pct to 104.90, while the Shenzhen B-share Index was down 23.40 points or 7.92 pct at 271.93.

The FTSE/Xinhua China B 35 Index was down 361.99 points at 3,909.76.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, ended the morning down 112.61 points or 5.84 pct at 1,816.44.

(1 usd = 6.8 yuan; 7.8 hkd)

Source: XFN-ASIA

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Bank of China (BOC), the country’s largest foreign exchange lender, said on Wednesday it had total exposure to failed U.S. investment bank Lehman Brothers of 128.82 million U.S. dollars.

The exposure, consisting of Lehman-related bonds of 75.62 million U.S. dollars and loans of 53.2 million U.S. dollars, accounted for 0.01 percent of the lender’s total assets and 0.19 percent of its net assets, the bank said in a statement on its website.

It said the loss would not cause serious impact to its financial status. It was still assessing possible losses and would pay close attention to new developments. It would also set aside relevant allowances timely according to cautious principles.

After Lehman Brothers filed for bankruptcy on Monday, BOC shares dropped by the daily 10 percent limit on Tuesday and tumbled a further 6.31 percent on Wednesday in the yuan-denominated market.

Source: Xinhua

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China A-shares closed sharply lower for a second day after China Merchants Bank announced a large exposure to Lehman Brothers, raising concerns about how much of the latter’s securities are held by other financial institutions.

China Merchants Bank (SSE:600036, HKG:3968) fell 9.96 pct to 14.47 yuan after tumbling almost 10 pct yesterday. It said it holds about 70 mln usd in Lehman debt securities.

Dairy firms plunged after authorities said they found more cases of melamine contamination in infant milk powder products. The new findings involve 22 firms, including Inner Mongolia Yili Industrial Group (SHA 600887).

Property developers also weighed on the market, while oil refiners were supported following a further decline in crude oil prices.

The benchmark Shanghai Composite Index closed down 57.59 points or 2.90 pct, at 22- month low of 1,929.05. The index has fallen 63.3 pct so far this year.

Turnover fell to 32.01 bln yuan from 33.82 bln yesterday.

The Shanghai A-share Index was down 60.07 points or 2.88 pct at 2,025.60, while the Shenzhen A-share Index fell 11.04 points or 1.84 pct to 587.70.

China B-shares closed sharply lower, extending yesterday’s decline, with property developers remaining under pressure amid a weak outlook for the sector, dealers said

All stocks in Shanghai finished in negative territory, while only one stock rose in Shenzhen.

China Vanke ( SZB 200002; SZA 000002), the country’s top property developer by market value, fell more than 7 pct in Shenzhen, while Shanghai Wai Gaoqiao Free Trade Zone Development (SHB 900912; SHA 600648) fell by the 10 pct daily limit in Shanghai.

The Shanghai B-share Index fell 9.36 points or 7.51 pct to 115.29, while the Shenzhen B-share Index was down 13.26 points or 4.30 pct at 295.33.

(Source XFN-Asia)

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The China Securities Regulatory Commission (CSRC) has released preliminary rules outlining the operational requirements for brokers seeking to offer margin trading and other businesses, according to a draft published on the commission’s website.

The rules include a provision holding brokers responsible for educating margin investors.

“Securities companies which obtain approval to offer new business categories of securities brokering, asset management and margin trading, should take effective measures in informing investors of relevant laws and risks,” according to the draft, which has been released for public comment.

The introduction of margin trading services has been widely anticipated by investors as a measure to encourage trading and prop up prices.

(Source: CSRC.gov.cn)

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