Sinomania! the truth about china
HOME   CHINA NEWS    Images   Books   more »
Loading

The Sinomania! Show

Season 1 Episodes 1-60: Follow the rise and fall of Shanghai stocks, important political and policy developments, travel reports, and interesting insight on investing in China 2007-2008.
Sinomania.TV

SEASON 2 PREMIERE SOON!

The next season of the Sinomania! Show will be the China Alternative Energy & Infrastructure Report with exclusive analysis and insight on the next wave of Chinese investment and expansion. As always, stay tuned!

» The Top 100 Chinese Companies
CHINESE INVESTMENT OUTLOOK
» What the BEARS Say ...
» What the BULLS Say ...
» Industrial Commodities
» FOREIGN DIRECT INVESTMENT (FDI)
» USA Direct Investment in China
CHINA EQUITY MARKET OVERVIEW
» February 27, 2007, "Correction"
» Select Indices
» Market Capitalization Updated
» China Treasury Bond Market
» China Corporate Bond Market
» Chinese Exchanges
» Types of Stocks
» History of Chinese Stocks

Types of Chinese Stocks
A SHARES
Shares held by the Chinese public, denominated and payable in Chinese currency (rinminbi).
B SHARES
Shares denominated in rinminbi and payable in foreign currency are designated for foreign investors. Future?
C SHARES
Shares denominated and payable in rinminbi and held by state-owned "legal persons" (i.e., state-owned companies and banks).
G SHARES
Shares of companies that have undergone "gugai" or share reform - formerly non-tradeable government controlled shares sold back into the A and/or B share markets.
H SHARES
Shares floated and listed on the Hong Kong Stock Exchange. The best rated H shares are called "Red Chips."
N SHARES
Shares floated and listed on the New York Stock Exchange.
L SHARES
Chinese companies listed on the London Stock Exchange.


CHINESE EXCHANGES
Shanghai
Shenzhen
Opened in 1990, the Shanghai Securities Exchange and the Shenzhen Stock Exchange are the largest stock exhanges on mainland China.
Dalian
The Dalian Commodity Exchange trades in corn (maize), and much more.
Shanghai Futures
Shanghai's Futures Exchange deals in rice and other futures.
Zhengzhou Commodity
The Zhenzhou Commodity Exchange trades sugar, cotton, and other staples.
Hong Kong
Chinese companies now make up half the market capitalization of the Hong Kong exchange, up from 10 percent a decade ago.

Eight of the 15 largest stocks in the Hang Seng Index are Chinese companies.


'Stir Frying' is slang for
speculating on shares

February 27, 2007, Correction

On February 27, 2007, Chinese stocks experienced the sharpest drop in a decade. Was it the long anticipated "correction" in Chinese equities? Below are the top ten Chinese listed companies (on USA exchanges) and how they fared:

COMPANY
TICKER
PRICE CHANGE
MARKET CAPITAL
PetroChina PTR (NYSE) 6.18% $205 Billion
China Mobile CHL (NYSE) 10.39% $176 Billion
SinoPec SNP (NSYE) 7.47% $69 Billion
China Telecom CHA (NYSE) 6.92% $36 Billion
CNOOC CEO (NYSE) 5.59% $34 Billion
China Unicom CHU (NYSE) 7.28% $15 Billion
China Netcom CN (NYSE) 8.22% $15 Billion
HuaNeng Power HNP (NYSE) 9.33% $10 Billion
Suntech Power STP (NYSE) 9.33% $5 Billion
Sinopec Shanghai SHI (NYSE) 8.71% $4 Billion
PCCW PCI (NYSE) 3.85% $3.9 Billion

 

Components for Halter USX China Index
(as of 09/25/06)
Company Name Symbol
Aluminum Corp. of China ACH
Actions Semiconductor Co., Ltd. ACTS
Asiainfo Holdings, Inc. ASIA
ASAT Holdings Ltd. ASTT
Baidu.com, Inc. BIDU
China Automotive Systems Inc. CAAS
Brilliance China Automotive Ltd. CBA
China BAK Battery, Inc. CBAK
China Eastern Airlines Corp Ltd. CEA
China National Offshore Oil Corp. CEO
China Telecom Corporation Ltd CHA
Chinadotcom CHINA
China Mobile Hong Kong Ltd. CHL
China Unicom CHU
China Medical Technologies Inc. CMED
China Netcom Group Corporation CN
China Techfaith Wireless Communication Technology Ltd. CNTF
Comtech Group, Inc. COGO
Ctrip.com CTRP
China Yuchai International Ltd. CYD
Deswell Industries Inc DSWL
Focus Media Holding Ltd. FMCN
Guangshen Railway Corp Ltd GSH
HuaNeng Power International, Inc. HNP
Hurray! Holding Co. Ltd. HRAY
International DisplayWorks, Inc. IDWK
INTAC International INTN
51 Job, Inc. JOBS
China Finance Online JRJC
KongZhong Corporation KONG
China Life Insurance Co Ltd LFC
eLong LONG
Linktone Ltd LTON
The9 Limited NCTY
Ninetowns Digital World Trade Holdings Ltd NINE
Nam Tai Electronics Inc NTE
Netease.com, Inc. NTES
New Dragon Asia Corp. NWD
Pacificnet Inc. PACT
PetroChina Company PTR
Radica Games Ltd RADA
Sinopec Shanghai Petrochemical SHI
Sina Corp. SINA
Semiconductor Manufacturing International Corp SMI
Shanda Interactive Entertainment SNDA
China Petro and Chem Corp (Sinopec) SNP
Sohu.com, Inc. SOHU
Suntech Power Holdings Co. Ltd. STP
Sinovac Biotech, Ltd. SVA
Tiens Biotech GR USA TBV
Tom Online Inc TOMO
UTStarcom, Inc UTSI
Qiao Xing Universal Telephone, Inc. XING
Yanzhou Coal Mining Co. YZC
China Southern Airlines ZNH

 

CHINA SHAREWATCH
China's Emerging Stock Markets, Securities Industry, with information on investing in China and the Latest News on Chinese stocks
 

(charts courtesy China Galaxy Securities)

Chinese Investment Outlook

WHAT THE BEARS SAY:

The Chinese economy suffers from excess capacity in several key areas including automobiles, steel, chemicals, and electronics.

Chinese consumers remain constrained by job and income insecurity associated with economic restructuring and a largely undeveloped (and in some areas, virtually non-existent) social safety net.

China needs to reduce the wide income and wealth gaps between rich and poor, urban and rural populations, and coastal and interior regions of the country.

China's underdeveloped banking system and the existence of huge amounts of non-performing loans may be a hindrance to balanced growth.

The services sector of the Chinese economy is relatively undeveloped and a lags in job creation.

China equities do not appear to be cheaply priced.

Chinese interest rates may rise in an effort to slow fixed investment, decrease deflationary pressures, and reduce speculation about renminbi revaluation.

Macro-level issues have the potential to create great uncertainty in China over the intermediate term, for example, political developments in Taiwan, reform of China's taxation system, the external value of the currency (renminbi), and a USA consumer slowdown and/or protectionist backlash against Chinese exports.

Owing to the country's relatively low per-capita income, China needs to raise its energy efficiency or consider switching to alternative energy sources.

In the next two decades China needs to add total jobs equivalent to the aggregate European labor force.

Over the past 20 years, property, capex, and lending bubbles disrupted the Chinese economy and challenged the government's ability to manage them.

Ecological, environmental, and health crises highlight China's growing needs for food, oil, and clean water and may hold growth below potential.

Chinese banks hold billions of dollars in nonperforming loans (NPLs). As of late 2004, approximately 25-30% of Chinese domestic bank loans were not being repaid and the amount of NPLs held by China's banks was believed to be between 25-50% of China's annual economic output, compared with under 10% for Japan.

The Chinese legal system has inherent uncertainties that could limit legal protections available to investors including difficulties in effecting service of the legal process and enforcing judgments against Chinese companies' management.

WHAT THE BULLS SAY

In 2006, industrial output in the January to August period increased at a rate of 17.3% following years of strong growth. China has emerged as the world's manufacturing superpower. As far back as 2003, China produced 35% of the world's cell phones, 40% of color TVs, and more than half (55%) of every computer monitor was made in China. China is making strides to be a global player in advanced technological sectors.

Macro reforms continue and are now the highest priority of China's government. Premier Wen Jiabao has vowed to continue reforms and improve macro controls.

Chinese household wealth continues to rise and in 2003 was valued at 16.9 trillion Yuan or USA $2 trillion. (Contrast to the USA where net savings is now negative.) China's savings rate is equivalent to 50% of GDP.

Along with household saving, China's ample financial resources include foreign exchange reserves close to one trillion dollars (USA $954.5 billion at the end of July 2006).

China is one of the world's leading buyers of raw materials, supplier of manufactured goods, and is an increasingly important contributer to Asian and global economic trade and development.

In the 2004 National People's Congress, Chinese authorities announced a constitutional amendment that "the State respects and protects human rights," and another amendment granting private property and the private sector their strongest legal protection in more than 50 years.

Business and financial strategists consider China in a positive secular long-term trend for investment purposes that is still, however, subject to short-term cycles.

Chinese auto sales reached 5.0 million in 2004, up 11% from the previous year and up 35% from 2002 levels. China's auto fleet is relatively small (about 30 million versus 117 million in USA) but new, therefore most sales are net additions.

In the past two decades China has added total jobs equivalent to the entire USA labor force.

The Chinese government has renewed its commitment to reforms, many of which promote significant economic growth. These reforms include: restructuring of State-Owned Enterprises (SOE) through improved corporate governance, corporatization, and share reform; continued disposal of SOE's non-performing loans; further opening of industries to foreign investment; and agreement by the China Securities Regulatory Commission (CSRC) to allow private and foreign investors to acquire majority stakes in domestically-listed companies.

Experienced China specialists focus on the following long-term investment strategies: growth utilities, resource companies, and selected natural resource, technological, and other companies that supply Chinese markets.

Believers of China's growth potential say the country must focus on increasing domestic demand (consumption) while drawing somewhat less support from externally driven demand (exports) and improving the efficiency of its capital allocation mechanisms (reforming the financial systems).

Industrial Commodities

China has accounted for over half of the growth in global oil demand since 1999. In 2004 China became the world's second-largest consumer of oil (approximately 7 million barrels per day, equivalent to one barrel per person per year.

By 2010 China may consume 47% of the world?s steel, 37% of aluminum and 34% of copper global production, and 18% of the world's paper, and 9% of all eythylene.

Foreign Direct Investment

Annual foreign direct investment (FDI) in china doubled over the past 10 years. In 2005 and 2004, FDI topped USA $60 billion a year. Recently, investment flows into China exceed the combined flows into other Asian emerging market economies. Direct investment from Japan boomed after 1993 and reached almost USA $6 billion by 2004.

Foreign individuals can invest directly in the Chinese stock markets through "B" shares on the Shanghai and Shenzhen stock markets, and via (American) Depository Receipts (ADRs), shares of Chinese companies listed on major international stock exchanges.

USA Direct Foreign Investment in China

From 2001 to 2005 USA direct investment (on a historical cost basis) in China grew from $12 billion to well over $16 billion annually.

American companies have made significant foreign direct investment in China with the top 10 largest investors committing well over USA $10 billion combined. Four American multinationals have made billion plus dollar actual contracted investments in China:

COMPANY INVESTMENT(USA $Billion)
Motorola $3.43
General Moters $1.85
Eastman Kodak $1.2
Coca-Cola $1.1

+----------CHINA EQUITY MARKET OVERVIEW----------+

Select Indices

The Halter USX China Index (components: see chart left)

Xinhua Finance indices (Xinhua FTSE, Xinhua Lehman)

Hang Seng China Enterprises Index H Shares (more data coming soon)

MSCI China Index -- (more data coming soon)

The Dow Jones China Indexes

China Market Valuation - Stock Market Capitalization

From 1990 to 2000, mainland China's stock market capitalization went from under a billion (USA) dollars to one of the top ten stock markets in the world.

By 2001, Chinese market capitalization reached over half a trillion dollars and surpassed Hong Kong for the first time. For the next few years Chinese stock market capitalization equalled or was within range of the Hong Kong market.

A bear market brought the combined Shanghai and Shenzhen markets down and by January 2006, China's domestic stock market capitalization stood at approximately $284 billion making it the fourth or fifth (depending on calculations) largest in Asia (ex Japan).

Since that time Chinese markets are once again up and have already exceeded the projections of some economists that China's markets could reach $2 trillion by 2010.

In fact, as of May 2007 the combined market capitalization of China's stock markets total $2.3 trillion, far ahead of Hong Kong ($1.7 trillion) and behind only Japan ($4.7 trillion) in Asia. In global terms, the Chinese markets still rank well behind the USA's combined $16.5 trillion, the UK (London) at $4 trillion, and the EU's Euronext at around $2.9 trillion.

Chinese Treasury Bond Market

Chinese treasury bonds are traded on fixed income exchanges in Shanghai and Shenzhen. The outstanding amount of Chinese treasury bonds has more than doubled over the period 1999 to 2003. By the end of 2005, the outstanding balance of Chinese Treasury bonds was over USA $450 billion.

Chinese Corporate Bond Market

Chinese corporate bonds are traded on fixed income exchanges in Shanghai and Shenzhen. The corporate bond market has increased rapidly in China in just the last few years. In 2004, the outstanding balance of Chinese corporate bonds neared the USA $5 billion.

History (back to top)

Stock and share trading in China dates to the mid Nineteenth Century and probably earlier. By 1891 the first stock market was set up in Shanghai. It became the largest and wealthiest stock market in Asia before it was shut down by the Japanese in 1941.

Stock markets in China today arose again with the economic transformation of the economy that began at the end of the Mao era and with the 1982 Constitution. By that time, Chinese were once again trading shares in enterprises.

Firms in Shanghai began issuing shares around 1984.

A trading counter was established by the Industrial and Commercial Bank of China in 1986.

The need for stock markets was obvious but ideological rationalizations were debated for sometime. Additionally, Hong Kong Chinese helped develop the framework for what would become China's new stock exchange in Shenzhen and the revived trading floor in Shanghai. Both opened in 1990.

National regulatory authority over the securities industry currently comes from the China Securities Regulatory Commission under the State Council.

Authorization comes from China's Securities Law that took effect in mid 1999.

Chinese Equity, Commodities, and Futures Exchanges
(back to top)

In additon to the list of major exchanges above, China also has a nationwide computerized trading system called STAQ, the Securities Trading Automated Quotations system, which is modeled on the U.S. NASDAQ system. The STAQ system is the world's largest in number of outlets.

There is also the National Electronic Trading System (NET) which trades shares owned by state-owned enterprises and Treasury Bonds

THE 100 LARGEST PUBLICLY TRADED COMPANIES IN CHINA (according to Fortune China magazine)

2007
Rank
2006
Rank
Company Revenues
($ millions)1
Profits
($ millions)1
Market value2
12/31/06
($ millions)1
Industry
1 1 China Petroleum & Chemical 133,963.3 6,497.5 97,348.1 Oil and gas
2 2 Petro China 88,358.8 18,239.7 254,187.2 Oil and gas
3 3 China Mobile 37,878.6 8,467.6 172,890.8 Telecommunications
4 N.A. Industrial & Commercial Bank of China 37,306.4 6,248.0 259,536.0 Banking
5 N.A. Bank of China 31,060.2 5,372.5 165,653.0 Banking
6 6 China Construction Bank 29,036.7 5,940.6 143,302.9 Banking
7 8 China Life Insurance 23,428.0 1,231.3 96,651.3 Insurance
8 4 China Telecom 22,455.0 3,480.9 44,422.0 Telecommunications
9 5 Baoshan Iron & Steel 20,236.2 1,668.5 19,449.0 Metals
10 N.A. China Communications Construction 14,733.1 410.3 14,688.9 Engineering and construction
11 7 Lenovo Group 14,627.8 161.1 3,144.7 Computers
12 10 China United Telecommunications 12,092.9 478.6 18,626.3 Telecommunications
13 11 CNOOC 11,407.2 3,966.3 41,256.4 Oil and gas
14 9 China Netcom Group (Hong Kong) 11,273.0 1,662.1 17,867.4 Telecommunications
15 13 Ping An Insurance 10,479.3 767.7 14,192.2 Insurance
16 18 Foxconn International Holdings 10,396.2 719.1 22,962.9 Electronics
17 12 Minmetals Development 9,807.6 68.1 776.3 Metals and mining
18 14 PICC Property & Casualty 9,150.1 267.0 5,728.0 Banking
19 15 China Resources 8,392.0 356.0 6,790.3 Diversified holdings
20 16 China Shenhua Energy 8,238.5 2,239.2 43,632.7 Energy
21 28 Aluminum Corp. of China 7,825.0 1,452.9 10,807.4 Metals
22 22 TPV Technology 7,186.6 152.0 1,231.5 Computers
23 38 Angang New Steel 7,001.7 877.8 7,904.1 Metals
24 37 Bank of China Hong Kong Holdings 6,751.5 1,804.7 28,744.1 Banking
25 25 China COSCO Holdings 6,539.8 260.5 3,524.9 Shipping
26 20 Sinopec Shanghai Petrochemical 6,473.8 94.5 4,962.6 Chemicals
27 21 Dongfeng Motor Group 6,189.7 266.9 4,185.2 Auto manufacturing
28 36 CITIC Pacific 6,033.9 1,060.9 7,535.3 Diversified holdings
29 26 China Southern Airlines 6,033.6 15.1 2,146.9 Airlines
30 27 Air China 6,028.3 409.3 7,571.6 Airlines
31 17 TCL 6,009.0 -247.8 782.8 Home appliances
32 24 Huaneng Power International 5,683.0 711.8 10,180.7 Electricity
33 19 Bank of Communications 5,543.4 1,624.8 55,711.4 Banking
34 30 Shanghai Electric Group 5,471.2 262.8 5,010.4 Power generation
35 23 Wuhan Iron & Steel Processing 5,298.7 499.8 6,393.0 Iron and steel
36 44 Shanxi Taigang Stainless Steel 5,140.9 310.8 4,455.9 Steel
37 40 China Merchants Bank 4,878.3 911.5 30,916.3 Banking
38 39 China Eastern Airlines 4,720.2 -356.5 1,921.8 Airlines
39 31 Maanshan Iron & Steel 4,401.4 292.0 3,678.7 Iron and steel
40 32 China International Marine Containers Group 4,253.6 355.5 4,980.9 Packages and containers
41 34 Hunan Valin Steel Tube & Wire 4,198.0 137.0 1,191.3 Iron and steel
42 33 Sinotrans 4,132.2 79.4 1,538.4 Logistics
43 N.A. Shanghai Automotive 3,911.9 182.7 6,864.0 Auto manufacturing
44 35 China Shipping Container Lines 3,911.8 110.2 1,631.6 Shipping
45 N.A. China Coal Energy 3,876.4 406.8 7,634.3 Energy
46 47 Shanghai Pudong Development Bank 3,831.3 430.0 11,901.6 Banking
47 29 TCL Multimedia Technology Holdings 3,760.6 -321.8 276.6 Home appliances
48 57 Harbin Power Equipment 3,731.7 131.4 1,464.2 Energy
49 43 China Minsheng Banking 3,698.9 491.4 13,299.7 Banking
50 82 Yunnan Copper 3,598.9 154.5 1,119.5 Metals
51 41 Tangshan Iron & Steel 3,550.9 183.2 1,627.6 Iron and steel
52 53 Shanghai Material Trading Center 3,498.2 8.9 264.7 Wholesale and retail
53 42 Jinan Iron & Steel 3,370.5 111.8 1,111.0 Iron and steel
54 58 COFCO International 3,335.9 127.0 2,826.5 Food
55 54 Chongqing Changan Automobile 3,292.8 82.9 1,729.3 Auto manufacturing
56 83 Jiangxi Copper 3,262.0 591.1 3,656.8 Metals
57 65 Suning Appliance Chain Store Group 3,196.8 92.4 4,196.5 Retail
58 62 Datang International Power generation 3,185.0 347.2 7,094.3 Electricity
59 63 GOME Electrical Appliances Holding 3,171.4 105.1 2,403.4 Home appliances
60 50 Bengang Steel Plates 3,166.6 211.8 2,143.6 Iron and steel
61 52 Laiwu Steel 3,119.6 95.7 725.0 Iron and steel
62 55 Digital China Holdings 3,109.9 28.1 284.9 Computers
63 60 Gree Electrical Appliances 3,052.6 80.6 1,226.1 Home appliances
64 46 ZTE 2,953.7 103.5 4,747.1 Telecommunications
65 51 Handan Iron & Steel 2,847.2 114.7 1,560.8 Iron and steel
66 49 Beijing Shougang 2,839.5 62.3 1,010.5 Iron and steel
67 N.A. Sinofert Holdings 2,709.4 114.9 2,417.1 Fertilizers
68 59 Shanghai Construction 2,693.5 32.5 480.6 Engineering and construction
69 68 Xiamen C&D 2,690.5 55.7 648.7 Wholesale and retail
70 61 Shanghai Friendship Group 2,678.0 18.3 412.5 Wholesale distribution
71 48 Guangdong Midea Electric Appliances 2,582.7 64.8 958.0 Home appliances
72 71 Great Wall Technology 2,554.6 -15.7 239.3 Computers
73 78 Weiqiao Textile 2,542.6 216.1 1,612.3 Textiles
74 64 Qingdao Haier 2,516.6 40.3 1,414.7 Home appliances
75 N.A. Eastern Communications 2,489.2 3.9 703.7 Telecommunications
76 73 Beiqi Foton Motor 2,476.6 6.1 358.0 Auto manufacturing
77 70 Sichuan Changhong Electric 2,405.6 39.2 1,027.3 Home appliances
78 N.A. Anhui Tongdu Copper Stock 2,391.2 74.9 749.4 Metals
79 56 Inner Mongolian Baotou Steel Union 2,342.5 83.8 1,356.7 Steel
80 77 Huaxia Bank 2,319.0 186.9 3,980.5 Banking
81 98 China Vanke 2,289.0 276.3 8,623.6 Real estate
82 N.A. Hunan Nonferrous Metals 2,278.3 57.9 1,983.5 Metals
83 76 AviChina Industry & Technology 2,194.4 -42.5 478.7 Auto manufacturing
84 88 Sinopec Kantons Holdings 2,185.1 20.1 268.6 Oil and gas services
85 67 Sinopec Yizheng Chemical Fibre 2,183.8 4.8 1,609.7 Oil and gas
86 89 Shanghai Zhenhua Port Machinery 2,155.6 205.5 4,525.5 Machinery
87 74 An Yang Iron & Steel 2,120.8 71.4 722.1 Iron and steel
88 75 Lianhua Supermarket Holdings 2,109.3 31.0 745.3 Retail
89 87 Inner Mongolia Yili Industrial Group 2,095.4 44.2 1,755.2 Food
90 N.A. China Mengniu Dairy 2,083.5 93.3 3,605.6 Food
91 N.A. Daqin Railway 2,070.5 560.5 13,480.2 Railway
92 69 Panzhihua New Steel & Vanadium 2,027.5 104.5 1,398.8 Iron and steel
93 72 Nanjing Iron & Steel 2,014.5 49.9 464.5 Iron and steel
94 66 Sinochem International 1,977.6 49.2 1,100.0 Oil and gas
95 94 Anhui Conch Cement 1,955.3 183.1 4,610.0 Building materials
96 81 Henan Shuanghui Investment & Development 1,940.5 58.5 2,052.9 Food
97 84 Huadian Power International 1,940.5 143.9 2,359.6 Electricity
98 90 Shijiazhuang Refining & Chemical 1,917.0 -205.4 1,147.4 Chemicals
99 79 Xiamen International Trade Group 1,910.4 26.0 396.0 Wholesale distribution
100 N.A. China Aviation Oil (Singapore) 1,888.5 237.4 9,221.6 Oil and gas
This report is based on information available to the public and no representation is made that it is accurate or complete. This report is not a recommendation to buy or sell the securities of companies mentioned. Sinomania! provides information only and does not offer any investment advice. See our important Disclaimers.
Sinomania!™ | Contact Us | top^
Copyright © 1993-2007 Sinomania!™ All Rights Reserved | Hosted by: HIS |