Month: July 2013

By Clement Tan

HONG KONG, July 17 (Reuters) – China’s surprise move to expand the size and reach of investment quotas represents the boldest reform yet this year in allowing foreign investors more access to its financial markets.

The measures unveiled by the top securities regulator on Friday are the latest in a series of steps Beijing has taken in recent months to fire up flagging investor interest, allowing foreign firms to move funds more freely into China and expanding another pilot programme to London, Singapore and elsewhere.

The China Securities Regulatory Commission (CSRC) almost doubled the quota of the Qualified Foreign Institutional Investor (QFII) scheme to $150 billion. The plan, introduced in 2002, allows investors to bring foreign currency into China to buy domestic stocks, bonds and money market instruments. Continue reading “China plays the long game in latest investment quota expansion”

By Clement Tan and Umesh Desai

HONG KONG, July 5 (Reuters) – China Rongsheng Heavy Industries Group, China’s largest private shipbuilder, appealed for financial help from the Chinese government and big shareholders on Friday after cutting its workforce and delaying payments to suppliers.

Analysts said the company could be the biggest casualty of a local shipbuilding industry suffering from overcapacity and shrinking orders amid a global shipping downturn. New ship orders for Chinese builders fell by about half last year.

Hours after China Rongsheng made its appeal in a filing to the Hong Kong stock exchange, where the company is listed, Beijing vowed to bring about the orderly closure of some factories in industries plagued by overcapacity.

The statement by the State Council, or cabinet, laid out broad plans to ensure banks support the kind of economic rebalancing Beijing wants as it looks to focus more on high-end manufacturing. It did not mention any specific industries or companies and there was no suggestion it was referring to Rongsheng.

Continue reading “China Rongsheng, symbol of shipping downturn, seeks govt help”

By Clement Tan

HONG KONG, July 2 (Reuters) — China’s financial system is more “robust” than widely thought and the recent cash crunch does not signal any systemic risk, according to a senior investment executive of one of the largest asset managers in the mainland.

Until Beijing pledged last week to ensure adequate funding, borrowing costs in the mainland spiked to record highs and stocks tanked, raising fears of a banking crisis that could compare with the 2008 one in the United States.

“In a few months time, people are going to look back on this and realize it’s all noise,” said Andrew Tan, chief investment officer at Hong Kong-based Harvest Global Investment, the international arm of Harvest Fund Management. The mainland-based parent manages more than $50 billion across asset classes in Asia.

Continue reading “China cash crunch not sign of a banking crisis, says large Chinese fund”