Posts tagged ‘SSE Composite Index’

01/08/2016

Didi, Uber said to merge in China in $35 billion deal | Reuters

Ride-hailing firm Uber is to merge its China operations with bigger rival Didi Chuxing, and hold a one-fifth stake in the new business, in a $35 billion deal to end bruising competition between the two, according to a source familiar with the matter.

A deal between the two – which have been spending heavily to gain market share and battling fiercely for passengers – could be announced as early as Monday, said the source, who declined to be identified because the deal is not yet public.

The new entity combines Didi’s most recent valuation of $28 billion and Uber China’s $7 billion valuation for the $35 billion market capitalization. Uber China investors will have a 20 percent stake in the new company, the source said.Uber did not offer any immediate comment. Didi could not be reached for comment.

“It makes huge sense, Uber faces an uphill task in China especially since Didi is multiple times larger by transaction value and city coverage,” said Hong Kong-based Richard Ji, co-founder of All-Stars Investment Ltd, which manages about $900 million and owns Didi stock.

“This will lead to favorable outcomes for both companies. The biggest benefit is cost savings, they no longer have to give out subsidies to drivers and passengers. It will give pricing power as the new entity will become the dominant player. That means profitability will come sooner than later,” he added.

Source: Didi, Uber said to merge in China in $35 billion deal | Reuters

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04/12/2015

Selective Equality? China Retirement Age Plan Sparks Backlash Among Women – China Real Time Report – WSJ

China’s policy makers have long accepted the need for workers to delay retirement to ease social and fiscal pressures from a rapidly aging population. Few, however, could agree on how to do it.

This week, state-backed researchers fueled fresh debate on the issue with a new proposal on how to coax more productive years out of China’s silver-haired generation. They called for gradually extending the country’s statutory retirement thresholds over the next three decades, culminating in a flat retirement age of 65 years. But their plan is proving unpopular. It is particularly striking a nerve among some women, who in China can retire between five and ten years earlier than men. The statutory retirement age for men is set at 60 years.

On social media, many female users mocked what they perceived as selective pursuit of gender equality. “In 2045, would there be equal pay between men and women? Would men be able to give birth?” a user, who identified as female, wrote on the popular Weibo microblogging service. “Chinese society, in reality, is rife with gender inequality; why bring about gender equality in retirement age?” another user wrote.

In an online survey, the state-run China National Radio found nearly 80% of respondents objected to setting a flat retirement age for men and women. “Delaying retirement is understandable, but setting the same retirement age for men and women isn’t compatible with our country’s conditions,” CNR quoted a Weibo user as saying. “Men would only have to work five more years, while women would have to work ten years longer. And women still have to face family pressures, so it’s clearly unsuitable.”

The proposal from the Chinese Academy of Social Sciences comes amid a longstanding debate in government and academic circles on how to implement a much-needed but deeply unpopular policy. Beijing has said it will gradually raise retirement thresholds starting in 2022, though the policy would only be finalized in 2017. Under rules unchanged since the 1950s, China allows most female workers to retire when they turn 50, while women in public-sector jobs can do so at 55 years of age. To change this, the CASS researchers proposed that the government could in 2017 set a flat retirement age for women at 55 years, eliminating the distinction between private and public-sector workers. Authorities could begin extending retirement thresholds—for men and women—at a fixed pace, starting in 2018.

CASS researchers suggest adding a year to the female retirement age every three years, while doing so for men every six years. Beijing could also allow flexibility for workers to bring forward or delay their retirement by up to five years, on the condition that their pension payouts would be adjusted accordingly, CASS said.

Source: Selective Equality? China Retirement Age Plan Sparks Backlash Among Women – China Real Time Report – WSJ

21/10/2015

Time to end China’s one-child policy urgently: government advisers warn of demographic crisis ahead | South China Morning Post

Government advisers have strengthened calls for China to further ease its stringent one-child policy urgently, ahead of a meeting this month during which the Communist Party’s decision-making body will set the tone for national economic and social development for the next five years.

Newborns receive vaccines in a hospital in China. Photo: Reuters

In a report recently submitted to the authorities, China’s top think tanks urged Beijing to immediately relax restrictions on the number of children couples are allowed to have, according to an academic with knowledge of the matter.

The report was based on a survey jointly conducted by several institutes including the Chinese Academy of Social Sciences, Renmin University and a think tank under the national family planning office, said the academic, who did not want to be named.

“There is already a consensus among China’s demographers that the limits should be relaxed,” said Wang Feng, a demographer with the University of California, Irvine, and a guest professor at Fudan University. “It’s … already too late to be doing so.”

While the survey’s contents were not made public, an earlier report by the China Business Network, a consultancy group, said it included predictions of the population trend and when it would peak. The survey had been commissioned by the decision-making authorities, highlighting the likelihood of a revision in the policy, the group said.

Source: Time to end China’s one-child policy urgently: government advisers warn of demographic crisis ahead | South China Morning Post

05/09/2015

What if the China Panic Is All Wrong? – China Real Time Report – WSJ

China’s stock-market routs and economic deceleration are widely cited as the major trigger for the latest round of global market volatility. But what if the dominant narrative about China—that the world’s No. 2 economy is on the verge of falling off a cliff—is wrong?

It would mean the global market turmoil hitting equities, commodities and currencies is an overreaction. “We may have seen overshooting,” said Hung Tran, executive managing director of global capital markets at the Institute of International Finance, an industry group representing around 500 of the world’s largest banks, funds and other financial institutions. Even the head of the International Monetary Fund indicated as much earlier this week.

One of the chief problems is that it’s difficult to gauge China’s black-box economy. The country’s true growth is a guessing game given a number of statistical factors. That’s why growth forecasts show a range spanning several percentage points. Lombard Street Research, for example, estimates the economy will only expand by 3.7% this year, nearly half Beijing’s official growth forecast. Even if China’s economy is healthier than many now fear, uncertainty is oxygen for market volatility.

More clarity from Beijing about growth prospects and crisis-management plans would likely prove fruitful. That’s why the U.S. plans to press Chinese officials for greater details on their policy plans at a meeting of finance ministers and central bankers from the Group of 20 largest economies late this week. Here are some of the arguments that might moderate market fears:

• China’s stock market valuation is a bad indicator of Chinese growth. “Investors should not get carried away by the collapse of the Shanghai Composite Index,” warns Melanie Debono from Capital Economics in note to clients, “not least because its performance often bears little relation to that of the economy, primarily due to wild swings in its valuation.” The market run-up in advance of the selloff was out of step with reality, says Nick Lardy, a China expert at the Peterson Institute for International Economics. That’s why he says there’s likely more to come in the Chinese market correction. Even after the rout, “The market was still trading at 39 times earnings. Give me a break, it’s still too high.”

• The devaluation of the renminbi likely isn’t Beijing scrambling to save the economy through competitive devaluation. Beijing’s depreciation was likely more about addressing a key concern for the International Monetary Fund as it considers whether to include the Chinese yuan in its basket of currencies that comprise its lending reserves than it was about reviving economic growth by juicing exports. On Aug. 11, Beijing changed the way it values the yuan, allowing markets to play a greater role in the exchange rate. Market pressure has long been for depreciation, so allowing the currency to be more market-determined would, in the near-term, naturally see the yuan move lower. Against a basket of global currencies, the yuan has appreciated over the last year by nearly 15%, accounting for inflation. That’s despite Beijing intervening for months to prevent the yuan from losing value. “So the fact that the yuan came down 3% to 4% is not going to make much difference,” said Ted Truman, a former top international finance official at the U.S. Treasury and the Federal Reserve.

GDP growth may not be nearly as bad as suspected. Economists such as Clare Howarth at Oxford Economics say that beyond official industrial production figures, data on car and cell phones sales are jacking up the risk that China’s growth stalls. But “critics are really overlooking the fact that the growth model has changed in China,” Lardy says. “The service sector is now the driver of growth. So the fact that industrial growth has slowed down quite a bit does not mean, as it would have meant 10 years ago, that the economy is falling off a cliff.” Based on electricity consumption, “I just don’t see any signs that the Chinese economy is experiencing a hard landing,” says Torsten Sløk, Deutsche Bank’s chief international economist. Joe Hockey, treasurer for an economy that is intimately tied to China, Australia, says market reactions have been overblown. “We’re confident about our understanding of the Chinese economy and we see over time huge opportunities for growth,” Mr. Hockey told the Journal.

• Rather than regressing to policies of old, China’s government has actually been showing signs of moving ahead with market reforms.

Source: What if the China Panic Is All Wrong? – China Real Time Report – WSJ

27/07/2015

China Stocks Make Sharpest Daily Fall Since 2007 – China Real Time Report – WSJ

China stocks made their sharpest daily percentage decline since 2007, as worries mount that authorities are pulling back on its measures to prop up the market. As WSJ’s Chao Deng reports:

The Shanghai Composite Index ended down 8.5% at 3725.56, its second-straight day of losses and worst daily percentage fall since February 27, 2007. China’s main index is up 6% from its recent low on July 8, but still off 28% from its high in June.

The smaller Shenzhen Composite fell 7% to 2160.09 and the small-cap ChiNext Closed 7.4% Lower at 2683.45

Analysts say the selling came as investors fear the government is curbing its buying of blue-chip stocks—and could even be testing whether the market can support itself.

“The previous support from the government funds is apparently unsustainable,” said Jacky Zhang, an analyst at BOC International. “They may withdraw support today to test whether the market has recovered its resilience. The government wants to use state funds to stabilize the market, not to prop it back to 5,000 point overnight.”

via China Stocks Make Sharpest Daily Fall Since 2007 – China Real Time Report – WSJ.

01/12/2013

China Poised to Surpass India in Gold Purchases – Businessweek

Yang Cuiyan, a 41-year-old housekeeper from Anhui province, is one reason China is poised to topple India as the world’s top consumer of gold. Standing outside Beijing’s busiest jewelry store, wearing a thick coat against the autumn chill, she clasps a gold necklace that cost her 10,000 yuan ($1,640), or five months’ wages. “I can put it on when I go back home to show everyone that I’m doing well.”

Yang is one of the legions of middle-aged Chinese women, respectfully referred to as aunties, who bought coins and jewelry this year. Gold purchases in the world’s second-largest economy will surge 29 percent in 2013, to a record 1,000 metric tons, according to the median of 13 estimates from analysts, traders, and gold producers in China surveyed by Bloomberg News. China’s purchases of gold climbed 30 percent, to 996.3 tons, in the 12 months through September, while sales in India rose 24 percent, to 977.6 tons, according to the London-based World Gold Council. India was No. 1 in 2012. Each country buys more gold than the U.S., Europe, and the Middle East combined.

Gold’s burnished appeal in China stems in part from a lack of alternative investments. While the MSCI All-Country World Index of equities rose 18 percent this year through Nov. 22, the Shanghai Composite Index slumped 3.2 percent. Policymakers clamped down on property investments in March to cool the housing market, ordering the central bank to raise down-payment requirements for second mortgages in cities with excessive price gains. “In China, you look around and see very few places to put your money,” says Duan Shihua, a partner at Shanghai Leading Investment Management. “With the share market down and the government nudging people away from real estate, gold will remain a favored choice.”

via China Poised to Surpass India in Gold Purchases – Businessweek.

30/12/2012

* Chinese College Dropout Turns Market Blog Into Pundits’ Favorite

It’s not only US kids who can start successful on-line business from home! As some author commented: Chinese now dream what used to be the American dream – “We can do it”.

Bloomberg: “When Hu Bin started his blog in early 2008, he was a skinny 22-year-old college dropout with a perpetually skeptical look on his face and little doubt he’d soon be a household name.

Chinese College Dropout Turns Market Blog Into Pundits’ Favorite

The previous year, the Shanghai Stock Exchange had been flooded by speculators. For a brief period, it was the second- busiest exchange in the world. It was also beginning a dramatic fall ushered in by the global financial crisis. Hu says he considered the market, considered his audience, and sensed it was time to make his mark.

Enlarge image

Blogger Hu Bin spent his early days predicting the rise of the Shanghai Stock Exchange and now foresees its continuing decline. Photographer: Kevin Lee/Bloomberg

“It really started when Premier Wen Jiabao announced a 4 trillion renminbi rescue plan for the economy,” Hu says. “I knew I just needed to be clever and use this chance of high liquidity in the market to make myself famous.”

Now 26, Hu is China’s most popular online market commentator, Bloomberg Businessweek reports in its Dec. 24 edition. His blog has gotten more than 400 million visits. His posts are equal parts outlandish and thoughtful, and employ liberal use of bolded, multicolored text and exclamation points.

Hu writes under the name Yerongtian, a character from a real estate-themed Hong Kong soap opera, and has been known to pick fights with other commentators, whom he says suffer from a “lack of emotion.” He has posted at least one picture of cats, and multiple pictures of himself wearing sunglasses to help illustrate his opinions.

‘Eccentric Behavior’

In 2009, the state-run newspaper China Daily listed him, under his alias, among the 10 people in the nation with the most influence on China’s stock market.

“Back then,” Hu says of 2008, “any eccentric behavior would attract people’s attention. If you understood this vital point, you could control people’s minds.”

Hu grew up in Kunming, a southwestern city of 6.4 million that’s far from China’s centers of finance. He learned about the stock market by watching his mother invest in her spare time, he says. She put money into the market in the 1990s, early days for Chinese investment, and lost it all. “Now she invests her money in gold,” Hu says.

He started at Kunming University, intending to study philosophy and Marxism, however quit, thinking he would take up investing himself.

“I was interested in psychology,” he says. “I wanted to know why everyone wanted to bet their future on an uncontrollable thing.”

Commander in Chief

Hu says that in the early days of his blog, his knowledge of the market was thinner than it is now. He has always, however, understood his audience and how to keep it interested.

Hu’s approach to his blog is purposefully bombastic, earning him vocal critics along with followers. In 2009, he got into a spat with another stock commentator, Hou Ning. Hou, at least according to Chinese news reports from the time, holds the record for the longest nickname of any stock commentator in history: Commander in Chief of the Stock Market Army.

The two made a 1 million yuan ($160,500) bet on the future of the Shanghai Composite Index (SHCOMP), with Hu wagering it would reach 4,000 by the end of the year. It didn’t, and Hu didn’t pay, though he got what he wanted out of the rivalry.

“Who would have paid attention to me if I had said 3,000?” he asks. “Everyone already knew it would reach 3,000.” In 2010, he promised to throw himself off one of Shanghai’s tallest buildings if the benchmark Shanghai Composite didn’t reach 5,800 by the end of the year. It didn’t: Hu is still with us.

‘Weather Vane’

Stunts aside, Hu has spent the last four years working through his thinking on the ups and downs of China’s economy in public, slipping thoughtful essays in between bouts of hyperbole.

He spent his early days predicting the rise of the Shanghai Stock Exchange and now foresees its continuing decline. One recent headline: “Doomsday Runs Wild, the Stock Market will likely drop 200 points!!” In another post, he explains that a drop in the market may not be bad. It could give the authorities some space to make reforms without worrying about overheating, and help to attract more foreign investment.

“The stock market is not only an economic weather vane,” he writes. “It is a political weather vane.”

Hu says he is not a financial rabble-rouser. Most laypeople should stay away from investing in individual stocks, he says. The people who read his blog, however, are generally not professionals; retail investors make up the majority of the volume of trading in the Chinese market. There are about 72 million retail investors in China, accounting for three-quarters of the trading on domestic exchanges, according to the China Securities Regulatory Commission.”

via Chinese College Dropout Turns Market Blog Into Pundits’ Favorite – Bloomberg.

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