China bars some financial firms from listing on OTC exchange: sources

JAN 20, 201612:51 PM

[SHANGHAI] China's biggest over-the-counter (OTC) equity exchange has suspended listings by certain kinds of financial firms, people told Reuters, its latest restriction aimed at reducing market risks in the fast-growing alternative listing venue.

The three sources said they had received notices from the exchange telling them of the new policy on listings on China's New Third Board, including a source in a company that had been planning to list.

The latest ban includes a halt on listings of certain kinds of financial firms, such as peer-to-peer lending companies and pawnshops. The suspension would not include traditional financial firms such as banks, trust firms and brokerages. "We've just received notice to suspend listings of all financial firms, regardless of which stage they're at," an underwriter, who declined to be named, told Reuters late on Tuesday.

The operator of New Third Board declined to comment.

The Beijing-based exchange was set up three years ago by the government with the mandate of funding China's small companies who could not access China's stock market.

The OTC board has expanded rapidly on government support, with the number of companies traded there surging to 5,499, almost double the number of Chinese firms listed on the stock exchanges.

However, trading on the exchange has been extremely volatile, with the New Third Board index doubling in the first four months of 2015, before slumping 40 percent in the following three months. The recent volatility has prompted regulators to step up supervision.

The latest measures come less than a month after the New Third Board suspended listings by private equity firms, signaling an expansion of restrictions on financial firms'fundraising on the board.

Analysts said that fundraising by newly-barred financial institutions on the New Third Board has been huge, squeezing out funding by other types of companies, and raising concerns that their proceeds are not being used properly.

Private equity firms including China Science & Merchants Investment Management Group and Beijing Tongchuang Jiuding Investment Management Co have been raising tens of billions of yuan in the OTC market.

Their rival CITIC Capital has also said that it plans to list a subsidiary on the New Third Board to build an exclusive platform for its yuan-denominated private equity business.

REUTER
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Islamic State frees 270 of 400 people kidnapped from Syria's Deir al-Zor

Islamic State on Tuesday released 270 of an estimated 400 civilians, most of them women and children, kidnapped at the weekend when its fighters attacked Syrian government-held areas in the eastern city of Deir al-Zor, a monitoring group said. 

PHOTO: REUTERS

JAN 20, 20169:43 AM

[BEIRUT] Islamic State on Tuesday released 270 of an estimated 400 civilians, most of them women and children, kidnapped at the weekend when its fighters attacked Syrian government-held areas in the eastern city of Deir al-Zor, a monitoring group said.

The Syrian Observatory for Human Rights also said, however, that the ultra-hardline group rounded up another 50 men on Tuesday during raids on houses in areas seized during four days of fighting in Deir al-Zor, the provincial capital.

Rami Abdulrahman, the Observatory's head, said that the group has kept male prisoners between the ages of 14 and 55 for more questioning.

"Those who they see have ties with the regime will be punished and those who (do) not must undertake a religious course based on the group's interpretation of Islam," he said.

The United States condemned violence against civilians in Deir al-Zor and said those responsible must be held accountable. "We demand the immediate and unconditional release of any civilians who were taken captive and of all those held by ISIL," US State Department spokesman Mark Toner said, referring to Islamic State by an acronym.

The civilians released will remain in Islamic State-run villages in the province of Deir al-Zor, which links the group's de facto capital in Raqqa with territory controlled by the militant group in neighbouring Iraq.

The group, which controls of most of the province, has laid siege since last March to remaining government-held areas in the city of Deir al-Zor.

REUTERS

    

China's trade faces relatively severe situation in 2016: commerce ministry

China's external trade faces relatively severe pressure in 2016, the commerce ministry said Wednesday. 

PHOTO: EPA

JAN 20, 201611:43 AM

[BEIJING] China's external trade faces relatively severe pressure in 2016, the commerce ministry said Wednesday.

Shen Danyang, the spokesman of commerce ministry, told reporter during a briefing that the ministry hopes the yuan exchange rate would be basically stable.

The comment came days after China reported a slide in both dollar-denominated imports and exports in December 2015.

REUTERS

    
 

Financial sector remained China growth driver as headwinds loom

The financial sector continued to fuel China's economic growth last quarter, cushioning a broader slowdown while also raising doubts over the sustainability of that boost amid renewed stock market weakness.

PHOTO: EPA

JAN 20, 201610:54 AM

[BEIJING] The financial sector continued to fuel China's economic growth last quarter, cushioning a broader slowdown while also raising doubts over the sustainability of that boost amid renewed stock market weakness.

Financial services jumped 12.9 per cent in the three months through December from a year earlier, the National Bureau of Statistics said Wednesday. The industrial sector expanded 5.8 per cent, weighing on the 6.8 per cent overall gross domestic product growth rate.

China's services sector output rose 8.2 per cent in the three months, decelerating from the previous quarter while still out pacing the sluggish manufacturing and construction industries as a property investment downturn remains a drag on the economy. The adrenaline shot from financial services may be tough to sustain, adding headwinds for an economy analysts see decelerating to 6.5 per cent growth in 2016.

"Financial services can never become a real key growth driver for a large country like China," said Xia Le, a Hong Kong-based economist at Banco Bilbao Vizcaya Argentaria SA. "When we find that the financial sector is contributing a large part to GDP growth, we need to go back to check the soundness of the calculating method and financial system."

Trading values on the Shanghai and Shenzhen stock exchanges rose to a daily average 1 trillion yuan in 2015, compared with 300 billion yuan a year earlier.

The daily average has slipped to about 560 billion yuan so far this year, according to data compiled by Bloomberg.

The contribution from financial services will likely fade over 2016, said Zhao Yang, chief China economist at Nomura Holdings Inc in Hong Kong. "It will become a drag this year, as the equity trading volume is in negative growth on a year-over- year basis," he said.

Separately, data showed foreign direct investment fell 5.8 per cent in December from a year earlier, while outbound investment climbed 6.1 per cent.

BLOOMBERG

    
 

Singapore shares tumble to lowest in more than 4 years

By

Angela Tanangelat@sph.com.sg

PHOTO: BLOOMBERG

JAN 20, 20161:42 PM

SINGAPORE'S blue chip Straits Times Index tumbled to its lowest in more than four years on Wednesday amid nagging concerns over crude oil prices and the faltering Chinese economy.

The STI fell to 2,560.94, and was trading around 2,562.43 at 1:11pm, down 76.04 points, or almost 3 per cent, from the previous day's close. This is the lowest level seen since July 2011. Losers led gainers by 310 to 53.

Sembcorp Marine and its parent company Sembcorp Industries were in active trading in the morning following rumours of a full takeover by the parent firm or just an injection of funds into Sembcorp Marine. Other losers included DBS, SingTel and property-related Capitaland.

Crude oil prices are currently trading near 45 year lows, with Brent around US$27 a barrel.

"Prices have been lower in everyday (nominal) terms of course, but adjusted for inflation, a barrel of Brent now costs less than at anytime since 1973, save for late-1998 when Brent briefly sold for US$16 a barrel in today's prices,'' David Carbon, an analysts at DBS said.

As for China, uncertainty over its stimulus measures remain a key wild card that could add more volatility to global risk appetite and keep the markets in a cautious mood, market watchers said.

    
 

China's slowing economy overshadows US: business lobby survey

JAN 20, 20169:15 AM

[BEIJING] China's economic slowdown is hitting profits at more foreign companies, a survey by an American business lobby showed, while the vast majority of respondents believed China's growth in 2016 would fall short of the central bank's forecast.

The number of foreign companies rating their business profitable dropped to a five-year low in 2015, while 45 per cent of about 500 respondents in the American Chamber of Commerce in China's annual survey reported that revenues in 2015 were down or remained flat from a year earlier.

Data from China's statistics bureau on Tuesday showed growth for 2015 was 6.9 per cent, its weakest pace in a quarter of a century, capping a tumultuous year that witnessed a huge outflow of capital, a slide in the currency and a summer stocks crash. . "Although many respondents remain optimistic about China's domestic market growth potential, almost half of survey respondents expect that China's overall GDP growth in 2016 will be lower than 6.25 per cent," the American Chamber said in its business climate survey.

The People's Bank of China in December forecast that the country's annual economic growth will slow to 6.8 percent in 2016.

The American Chamber survey results, published on Wednesday, underscore the growing unease and challenges faced by some overseas companies in the world's second-biggest economy.

Forty-eight percent of respondents expected GDP growth this year to reach 6.25 per cent or less, while 35 per cent said the economy would increase between 6.25 and 6.75 per cent.

Business confidence also was impacted by regulatory and protectionist concerns, following a series of government investigations targeting foreign companies and the roll-out of a national security law limiting the use of overseas technology.

For the first time in five years, respondents cited "inconsistent regulatory interpretation and unclear laws" as the top business challenge, the report said.

Seventy-seven percent of respondents said they believed foreign companies were less welcome than before. "While the Chinese leadership has emphasized that the country will follow the rule of law, our members continue to report that the regulatory and judicial process are less than fair and lack adequate oversight," James Zimmerman, Chairman of AmCham, said in the report.

Overall, 64 per cent of respondents said their companies were financially profitable in the last year, compared with 73 per cent in 2014.

Revenues at 45 per cent of the firms remained flat or declined compared with a year earlier, compared with 39 per cent in 2014, the report said. "While China remains a top investment priority, fewer copmaies are increasing their investment levels in China," the report said.

REUTERS

    
 

Microsoft donates cloud computing 'worth US$1b'

Microsoft said Tuesday it will put a billion dollars' worth of cloud computing power in the hands of non-profit groups and university researchers free of charge. 

PHOTO: AFP

JAN 20, 20169:09 AM

[SAN FRANCISCO] Microsoft said Tuesday it will put a billion dollars' worth of cloud computing power in the hands of non-profit groups and university researchers free of charge.

A philanthropic arm of the US software colossus will make the donation during the coming three years to 70,000 non-profit groups and researchers, chief executive Satya Nadella said while attending the World Economic Forum in Davos, Switzerland.

Cloud computing lets people use the Internet to tap into processing or data storage capacity at huge data centers.

"Among the questions being asked in Davos are these: If cloud computing is one of the most important transformations of our time, how do we ensure that its benefits are universally accessible?" Mr Nadella said in an online post.

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"What if only wealthy societies have access to the data, intelligence, analytics and insights that come from the power of mobile and cloud computing?" The philanthropic move comes as Microsoft continues adapting to a trend of people economically renting software as services in the Internet cloud instead of buying and installing programs on their machines.

"Last fall, world leaders at the United Nations adopted 17 sustainable development goals to tackle some of the toughest global problems by 2030, including poverty, hunger, health and education," Mr Nadella said.

"A careful read of those goals reveals the central role that data and cloud computing must play for analysis and action." Microsoft chief legal counsel Brad Smith said the massive computing power available in the cloud can help researchers mine insights and secrets from data.

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