A chapter in the courtship of China’s top 4 banks by western rivals is finally about to close, with word that Bank of America (NYSE: BAC) is looking to sell its remaining stake in China Construction Bank (HKEx: 939; Shanghai: 601939), China’s second largest lender. This looming divorce shouldn’t come as a surprise to anyone, as it’s really just the final break-up between big western banks that once held out big hopes of entering China’s banking market through tie-ups with major state-run lenders. In an interesting twist to the story, we’re actually seeing some of the big Chinese banks make their own recent international tie-ups as they look to perhaps someday challenge the big western lenders on the global stage. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 4. To view a full article or story, click on the link next to the headline.
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China’s Bright Food In Talks To Buy Israeli Food Group Tnuva (English article)
After several years of trying to figure out what to do with billions of dollars in problematic loans made by Chinese banks during the global financial crisis, Beijing may be close to a long-term solution with plans to create a special market for selling off those loans. Central leaders should be commended for finally addressing a problem that has been hanging over China’s banking sector for the last 2 years, putting the nation’s financial recovery at risk. At the same time, this latest rescue plan once again underscores the close relationship between China’s major banks and the central government, which often prevents them from behaving like true commercial banks. Read Full Post…
China’s big 4 state-owned banks are a relatively orderly group in their home market, largely respecting historical boundaries set by Beijing. But industry leader ICBC (HKEx: 1398) is quickly emerging as the most aggressive player on the global stage, with word that it’s in talks to buy a major London-based commodities and forex trading operation. These latest talks are just part of a recent global acquisition spree by ICBC, but they look particularly interesting as they present one of the most direct challenges yet to big 4 lending rival Bank of China (HKEx: 3988; Shanghai: 601398). Read Full Post…
The ongoing cash crunch at Chinese banks may be partly behind reports that a trio of regional banks are aiming to make IPOs in Hong Kong, with Bank of Shanghai, Huishang Bank and CGB all aiming to list in the second half of the year. These regional lenders may also be losing patience while waiting for China to lift a freeze on new IPOs that dates back to last year, which has led to a backlog of dozens of companies that want to make offerings. The China Securities Regulatory Commission (CSRC) had been giving signals that it could soon lift the freeze, though it may change its mind if the current sell-off on Chinese stock markets continues. Read Full Post…
A liquidity crunch rocking China’s banks has also wreaked havoc on their stocks, prompting their biggest shareholder Central Huijin to step in to try and ease the share sell-off. Huijin so far has limited its buying activity to the Shanghai stock exchange, in what looks like a modestly successful campaign to support shares of big name banks like ICBC (HKEx: 1398; Shanghai: 601398), China Construction Bank (HKEx: 939; Shanghai: 601939) and Bank of China (HKEx: 3988; Shanghai: 601988). Given the success of this modest program, there’s the interesting possibility that Huijin could expand the program to Hong Kong, where H-shares of the same banks have fallen much more steeply. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 23. To view a full article or story, click on the link next to the headline.
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GalaxySecurities (HKEx: 6881) Soars 11 Pct In Debut After $1.1 Bln HK IPO (English article)
Sovereign Funds, China Construction Bank (HKEx: 939) Buy Into Russia’s VTB (English article)
Qihoo 360 (NYSE: QIHU) Partners with Etao to Introduce Shopping Search (English article)
Shanda Games (Nasdaq: GAME) Reports Q1 Unaudited Results (PRNewswire)
Pactera (Nasdaq: PACT) Board Forms Privatization Plan Review Committee (PRNewswire)
A new media report says global banking giant HSBC (HKEx: 5; London: HSBA) is likely to sell-off more of its Chinese assets, continuing an ongoing divorce by top global lenders tired of slow progress in the complex China market. This latest report doesn’t have any specific insider knowledge of a looming sale, but rather quotes analysts saying such a move is likely. (English article) Still, such disposals seem both likely and logical, following HSBC’s sale last year of its 15.6 percent holdings in Ping An Insurance (HKEx: 2318; Shanghai: 601318) after years of inability to get any strategic returns out of the tie-up. Read Full Post…
New statements from 2 of China’s top 4 banks indicate a recent share buyback by their state-owned controlling stakeholder is done, raising the question of just how effective the program was and whether we might see more similar buybacks soon. Based on my own quick analysis, the program does seem have had some limited positive effect, with Shanghai-listed shares of both ICBC (HKEx: 1398; Shanghai: 601398) and Agricultural Bank of China (HKEx: 1288; Shanghai: 601288) outperforming the market over the last 6 months during the program period. Read Full Post…
The near non-stop capital raising by major Chinese banks is showing no sign of slowing, with China Construction Bank (HKEx: 939; Shanghai: 601939) announcing yet another new plan to sell up to 40 billion yuan, or $6.5 billion, in subordinated debt to shore up its balance sheet. Similar to most recent cases, these bonds will be sold into the inter-bank bond market for domestic buyers, meaning that big state-backed institutions are likely to pay most of the bill for this latest recapitalization of a major Chinese bank, most of which are standing on the cusp of a major bad-loan crisis.
The following press releases and media reports about Chinese companies were carried on November 17-19. To view a full article or story, click on the link next to the headline. ══════════════════════════════════════════════════════
China Construction Bank (HKEx: 939) Approved to Issue Up To 40 Bln Yuan in Notes (HKEx announcement)
NetEase (Nasdaq: NTES) Social Networking Site Stops Service (Chinese article)
Suntech (NYSE: STP) Reduces Production at Arizona Factory (PRNewswire)
The near non-stop capital raising by major Chinese banks is showing no sign of slowing, with China Construction Bank (HKEx: 939; Shanghai: 601939) announcing yet another new plan to sell up to 40 billion yuan, or $6.5 billion, in subordinated debt to shore up its balance sheet. Similar to most recent cases, these bonds will be sold into the inter-bank bond market for domestic buyers, meaning that big state-backed institutions are likely to pay most of the bill for this latest recapitalization of a major Chinese bank, most of which are standing on the cusp of a major bad-loan crisis.
