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Volume I, Episode 30
August 30, 2007
Chinese Stocks Stay Up - Big Bond Sale - IPOs - Upcoming Party Congress in Beijing
Sinomania.TV

August 22, 2007

China Stock Markets Get Higher But For How Much Longer? - Surprise Rate Hike - IPO Update

August 14, 2007

China Toy Recall - Markets & IPOs - Western Banks Catch Asian Flu?

August 6, 2007

Shanghai Composite Busts Past 4,600 - Beijing Bets on Banks - Chinese IPOs in Japan

July 31, 2007

China Stocks Up Again & Again! - Pussyfooting Around Currency? - Democracy in Japan?!

July 25, 2007

Will Barclay's Turn Chinese? 2Q/H1 Macro Report + IPOs!

July 19, 2007

Food Fight! China-USA sling hash / Peak Oil? / Markets Flat Line...

July 10, 2007

Chinese markets confused? Big IPOs - Chery+Chrysler

June 27, 2007

COSCO - China Mobile - IPOs - Telecom Mergers & Acquisitions

June 21, 2007

New Record Highs in Hong Kong, Shanghai: Will Beijing Put On the Squeeze? - IPOs & more

June 15, 2007

Fundamental Misalignment: US-China currency war - stock markets up & IPOs

June 7, 2007

China Stock Pop - Hot News items - climate change, tainted food...

May 31, 2007

Chinese stock markets hiccup - IPOs - USA-China Trade Gap

May 25, 2007

Report on the 2nd USA/China Strategic Economic Dialogue: Win-Win or When-When? - Market numbers - New IPOs


May 18, 2007

New life for Hong Kong? IPO Update - USA/China summit


May 11, 2007

Will Shanghai end up like NASDAQ or Nikkei? - IPOs


April 30, 2007

Tulips to Dotcom - is Sino Mania the next big bubble?


April 20, 2007

The Heat is on! - IPO Report - Air Pollution in China


April 15, 2007

China markets, IPO update, Beijing Ready for Olympics?


March 30, 2007

China markets up, up, up! Sinomania! goes to China


March 23, 2007

Focus on National People's Congress... Hi-Tech, IPOs


March 17, 2007

China's new investment strategy, IPOs, the Wrap...


March 7, 2007

China syndrome or hong bao bounce? New IPOs... more!


February 27, 2007

China Stock Market Yo-Yo, new IPO issues, the wrap


February 17, 2007

Chinese New Year edition! Will China buy Chrysler & more!


February 9, 2007

The USA-China WTO trade dispute and New IPOs


February 1, 2007

IPOs: New Red Chip — Bubble Burst? — USA-China


January 26, 2007

BUBBLE TROUBLE? — IPOs on NASDAQ — Renminbi Yuan


January 20, 2007

IPOs in 3 hot sectors — BAOSteel — Macro Report


China MARKETS » China WEATHER »
HKEX Hang Seng Shanghai
SSE Shanghai Hong Kong
SZEX Shenzhen Beijing
MUSIC in China: Listen!
 

TRANSCRIPT: Chinese Stock Indexes Stay Up; Big Bond Sale for China's New Sovereign Wealth Fund; IPOs; and Speculation on the Upcoming Party Congress in Beijing...
Sinomania! Volume I Webisode 30, August 30, 2007

Hu Cleans House but For Whom?
Beijing Sells Bonds;
And more IPOs!

MAJOR INDEXES UP

The Shanghai Composite index has gained over 700 points so far this month. It's been above 5,000 since August 23 and reached a record high Tuesday at 5,195. So far this week the index is up slightly overall and closed at 5167.884 today.

The CSI 300 surge continues. The index is above 5,000 for a week, back up today to close at 5241.228.

Shanghai B shares gained near three percent August 30 closing at 322.23. Shanghai Bs are getting close to recovering the ground lost since the beginning of August.

ShenZhen B shares show much the same pattern with the index recovering from the slide that began last Friday to close August 30 at 737.812.

In Hong Kong the Hang Seng index is in a sustained rise since August 20 when the State Administration of Foreign Exchange allowed direct investment in the Hong Kong market by retail investors in mainland China who will not be subject to the annual cap currently around $50,000 US dollars imposed on Chinese residents. In my view, this means Hong Kong could be in the early stages of a major rally and the Hang Seng could stay above 20,000 for a while. The Hang Seng index marked a record high August 27 and closed Thursday at 23,485.

BEIJING SELLS BONDS

The Chinese Ministry of Finance will sell 600 billion Yuan (around $79 billion US dollars) worth of bonds to finance the new sovereign wealth fund that will diversify China's massive foreign exchange reserves away from US Treasury securities. The new investment group will be larger than Singapore's Temasek, a model of sorts for sovereign wealth funds, and could soon rival Norway's big government pension fund that invests Norway's petrodollars.

The bonds will be gradually sold so not to upset China's poorly performing government bond market which has anticipated the debt sale for some time.

Sovereign wealth funds will be one of the most important players in financial markets in years to come according to Morgan Stanley economists and there is already a growing suspicion of these state-controlled investment houses. China's investments into the Blackstone Group and Barclay's Bank was a hot topic and the subject of earlier episodes.

According to the German edition of the Financial Times, on a state visit to China this week German Chancellor Angela Merkel was told by Chinese officials that China's sovereign wealth fund was interested only in financial investments, a statement prompted by the German government's concern of possible Chinese takeover of heavily protected German industries.

IPO REPORT

An update on our report on Alibaba, China's biggest ecommerce firm - the IPO of its business-to-business assets is on and set for the Hong Kong exchange. The debut could raise a billion US dollars and start trading as early as September.

Here's an opportunity in China's dynamic and lucrative energy sector - Anton Oilfield Services of Beijing, which sells drilling equipment to Chinese oil majors, hopes to raise up to $150 million US dollars with a IPO in Hong Kong sometime early 2008. So watch for that one!

Finally, China's third largest airline, China Eastern, is close to selling a major stake to Singapore Airlines. The company has not recovered from losses during the SARS crisis and is unprofitable. Its shares traded on the New York Stock Exchange under symbol CEA until May 21 when an undisclosed "major problem" forced a suspension. At its frozen price, Singapore Airlines may get a bargain for an airline with excellent routes and a fleet of new Airbus and Boeing planes.

HU CLEANS HOUSE?

There is a renewed call to accelerate financial reforms by President Hu Jintao. Hu wants financial policy to be used in a 'more efficient way' as macoeconomic controls over China's red hot economy.

Yesterday's surprise resignation of Finance Minister Jin Renqing may be a sign of bolder financial changes to come.

The press in Hong Kong and much of the world says comrade Jin was sacked because he had a mistress and is part of new purge of old Jiang Zemin cronies in anticipation of the 17th National Congress of the Communist Party of China that will convene October 15 in Beijing.

But Jin Renqing had a long and distinguished career and kept a remarkably low profile. He is not purged from the party. On the contrary, Jin will now head the Development Research Center of the State Council a policy position of some influence. It is true Jin was elevated to Finance Ministry senior management under former President Jiang Zemin but he is 63 and since most government positions in China have a mandatory retirement age of 65 he could not serve another full term.

The 17th party congress will be one to watch closely. President Hu does not currently have an apparent protege to take over when his presidency ends. There will be a lot of jockeying among Beijing Mandarins and rumours are a woman may emerge in the top power circles.

I'll see you next time!

© Sinomania! 2007 All Rights Reserved.

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