Monday, July 6, 2015

China-listed firms rush to file trading halts as markets slump

China-listed firms rush to file trading halts as markets slump

[SHANGHAI] The number of Chinese-listed companies seeking to halt trading in their shares has surged since the country's bourses began a precipitous plunge in the middle of last month, prompting concern some firms are trying to escape the turbulent markets.
Over 700 firms listed in Shanghai and Shenzhen - equivalent to around a quarter of the firms on the two exchanges - have issued requests to suspend trading or extend trading halts since a June 12 peak, according to an analysis of company filings.
China's stock market has crashed 30 per cent since its mid-June highs, ending an eight-month-long bull run and leading to an unprecedented series of support measures from Beijing aimed at halting a slide that has raised fears about the stability of the world's second-biggest economy.
The number of firms that have requested trading halts or extensions since then is around double the number for all of April, the analysis shows, underlining a concern traders have that firms can too easily suspend their shares to avoid the worst impacts of a downturn. "How is it possible that so many firms are calling for trading halts in such a short period of time?" said Guodu Securities analysts Xiao Shijun. "At the moment, regulators have only one eye open. In a crash, a firm can use any small matter to call for a halt."
The 702 firms, out of roughly 2,800 firms listed on the main Shanghai and Shenzhen bourses, said the trading halts were linked to restructuring, planned share placements or the pending release of a "significant matter".
A person with direct knowledge of listing procedures on the Shanghai exchange said there had been a large recent bump in numbers of applicants for trading halts and it was possible that firms were using these as a way to sit out the market slide. "We cannot rule out that companies are halting trading to prevent further falls in their share prices," the person said, adding that firms would face fines if they were found to have requested trading halts without good reason.
She added that firms were generally able to halt trading for periods ranging from 10 working days to up to three months.
In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helping keep the main indexes in the black on Monday despite huge volatility.
Others said the rise in trading halts could actually create more stability in the markets. "Trading halts could help prevent volatility in the index in the near term, so it could have a positive impact," said Cinda Securities analyst Liu Jingde.
REUTERS

Singapore's direct exposure to Greece negligible, says MAS

Singapore's direct exposure to Greece negligible, says MAS

The Singapore economy's direct exposure to Greece is "negligible", and its domestic money and foreign exchange markets continue to function in an orderly fashion, the Monetary Authority of Singapore (MAS) said on Monday evening.
Greece accounts for just under 0.2 per cent of Singapore's total trade, and 0.1 per cent of Singapore's total banking system assets, the MAS said in response to media queries.
But there is "some uncertainty" over the broader impact of the ongoing developments in Greece.
"MAS is closely monitoring developments in the eurozone economy and global financial markets, and their potential impact on domestic markets and the economy," Singapore's central bank said
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Beijing names preferred chief for China-led bank

Beijing names preferred chief for China-led bank

[BEIJING] Beijing on Monday named a former vice minister of finance as its preferred candidate to head the China-led Asian Infrastructure Investment Bank (AIIB), a potential rival to the Washington-based World Bank.
"The Chinese government has officially nominated Jin Liqun to be China's candidate for the presidency of the AIIB," the finance ministry said in a statement.
He is effectively certain to be appointed as Beijing will initially have a 26.06 per cent share of the votes at the bank, giving it veto power over the choice of the president, which requires a 75 per cent majority.
The AIIB has been viewed by some as a rival to the World Bank and Asian Development Bank, and the United States and Japan - the world's largest and third-largest economies, respectively - have notably declined to join.
Beijing will be by far the largest AIIB shareholder at about 30 per cent, according to the legal framework signed by 50 founding member countries last week.
Mr Jin, who is now chief of the AIIB's preparation body, has previously worked for both the World Bank and the Asian Development Bank, as well as the finance ministry, according to a biography attached to the statement.
He was also formerly a top official at the China Investment Corporation, the country's sovereign wealth fund, it showed.
He has "abundant experiences in leading and managing government agencies, international organisation and private companies", the statement said.
A Hubert Humphrey Fellow in economics at Boston University in 1987-88, Jin has a master's degree in English literature, speaks fluent English and reportedly good French.
Nominations close this month and the president will be elected at the inaugural meeting of the bank's board of governors after it is officially launched, expected to be later this year, the Chinese finance ministry statement said.
AFP

China's economy shows positive changes

China's economy shows positive changes

[BEIJING] China's economy is showing some positive changes as recent government measures gradually gain traction, the National Bureau of Statistics said on Monday.
China's economic performance remained within a "reasonable range" and economic growth was basically stable, Sheng Laiyun, the bureau's spokesman, said in remarks published on the bureau's website.
The government is due to release second-quarter gross domestic product data on July 15 and many economists expect growth to dip below 7 per cent, which would be the weakest performance since the global financial crisis.
Weighed down by the property downturn, factory overcapacity and high levels of local debt, China's economic growth in 2015 is seen slowing to around 7 per cent - the weakest annual expansion in a quarter of a century.
REUTERS

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