Archive for D.Collins

China Market Update

Chinese scientists repurpose silkworms as virus shredders

SCMP

Chinese scientists have found a way to turn silkworms into virus killers, a technology they say will not only increase worldwide silk production but can also fight human viruses such as HIV.

The researchers transformed a popular gene-editing tool into a weapon that the silkworm can use to shred deadly viral strains into fragments, according to a paper in the latest issue of the Journal of Virology.

A bacteria named CRISPR/CAS is an immune system that attacks attack foreign genes in a host body. CAS9, a simplified version of the system, has been widely used by life scientists as a “molecular scalpel” to modify animal and human genes.
The research team in Shanghai tweaked the CAS9 system so it could recognise and attack Bombyx mori nucleopolyhedrovirus, a virus responsible for more than 80 per cent of unnatural deaths of domestic silkworms. They injected the system into worm eggs and produced a new transgenic species capable of generating CAS9 in its cells.

Data traffic lifts China Mobile revenue above $100 Billion USD

FT

China Mobile saw wireless data traffic become its largest revenue source for the first time in 2016, outstripping the combined inflows from voice, text messages and multimedia messages.

Operating revenue for the state-owned telecoms operator rose 6 per cent year on year to Rmb708.4bn ($102.8bn), with revenue from telecommunications services up 6.7 per cent and accounting for Rmb623.4bn. Wireless data traffic revenue grew by 43.5 per cent year on year to account for 46.2 per cent of annual revenue from telecommunications services.

Net profit rose 0.2 per cent to Rmb108.7bn ($15bn), coming in a median estimate from analysts of Rmb108.3bn compiled by Bloomberg.

China Mobile raised its final dividend to HK$1.243 per share ($0.16), bringing the total dividend for the full year to HK$2.2732 per share, a payout ratio of 46 per cent.

The company, which has 71 per cent of China’s 4G subscribers, added 223m 4G customers in the twelve months to December, bringing its subscriber base for these services to 535m.

China Mobile said it expects government policies – such as the need to upgrade bandwidth as part of Premier Li Keqiang’s “internet plus” strategy and the scrapping of domestic long-distance and roaming charges starting from October – to negatively impact its 2017 results.

Fedex of China, SF profit surges nearly 113% but share price decreases

CHINA’S biggest parcel delivery firm SF Holding’s annual profit soared nearly 113 percent in 2016, the company said yesterday in its first annual report since listing, but that did not boost its share price.

The company’s annual profit jumped about 113 percent year on year to 4.2 billion yuan (US$608 million) last year while its operating revenue rose 22 percent to 57 billion yuan. It delivered 2.58 billion parcels last year, up 31 percent from 2015, SF said in a notice filed to the Shenzhen Stock Exchange.

The financial results, however, didn’t buoy its shares, which shed 3.21 percent to 60.89 yuan yesterday.

The company’s market valuation hit 254.7 billion yuan by the end of yesterday, overtaking the country’s biggest developer Vanke Co and electronics giant Midea Group as the most valuable company listed in the Shenzhen market.

Caixin magazine said earlier the China Securities Regulatory Commission was closely observing SF’s trading amid concerns that the company aimed to capitalize on the huge share price gain to issue additional shares at a higher price.

SF listed on February 24 via a backdoor listing by injecting assets into Maanshan Dingtai Rare Earth & New Materials.

America No Longer Capable to Produce Televisions , but They Can Program Your Korean One to Spy on You.

China Market Update- 12MARCH2017

Japan to Develop First-Strike Capability Against North Korea

By Tim Kelly and Nobuhiro Kubo

TOKYO (Reuters) – Rattled by North Korean military advances, influential Japanese lawmakers are pushing harder for Japan to develop the ability to strike preemptively at the missile facilities of its nuclear-armed neighbor.

Japan has so far avoided taking the controversial and costly step of acquiring bombers or weapons such as cruise missiles with enough range to strike other countries, relying instead on its U.S. ally to take the fight to its enemies.

But the growing threat posed by Pyongyang, including Monday’s simultaneous launch of four rockets, is adding weight to an argument that aiming for the archer rather than his arrows is a more effective defense.

“If bombers attacked us or warships bombarded us, we would fire back. Striking a country lobbing missiles at us is no different,” said Itsunori Onodera, a former defense minister who heads a ruling Liberal Democratic Party committee looking at how Japan can defend against the North Korean missile threat. “Technology has advanced and the nature of conflict has changed.”

American women offers citizenship for cash on Shanghai marriage market

SCMP
An American woman has invited bids for her hand and home country at the Shanghai marriage market, touting her US citizenship as her major selling point.

Photographs of the woman at the Shanghai market were posted on Sina Weibo by users last Saturday, and were shared by many.
The woman in the picture, dressed in a form-fitting wedding gown, held up a sign written in Chinese and English that offered “USA Citizenship through marriage to the highest bidder.” She also held her US passport in her other hand to confirm her offer.

The Shanghai marriage market is a matchmaking event held at the People’s Park in Shanghai for several hours every Saturday and Sunday, where hundreds of parents gather to search for suitable spouses for their children.The parents pin information on their sons’ and daughters’ ages, height, weight, occupations and education levels on umbrellas, which they leave open for other parents to view.

China Market Update-06MARCH2017

Chinese Soccer League Becomes Biggest Global Spender

Sports Quake
CSL SMASH EPL TRANSFER SPEND

The January transfer window in China closed on Tuesday and saw Chinese Super League (CSL) clubs smash their spending record. A total of £331m was spent by CSL clubs which surpassed the £215m spent by the Premier League.

The £331m spent was £36m more than the previous record, set in 2016. This is a remarkable increase from 2013 which saw just £25m spent – showing the rapid growth and investment in football in China. Guangzhou Evergrande’s signing of Oscar from Chelsea for £60m was the biggest deal globally. However, Guangzhou recently announced they vow to phase out foreign players over the next years. The ‘best team in China’ is leading the way in helping strengthen the domestic game and achieve the objective of making China competitive at international level.

This weekend also marks the return of Chinese Super League and the much-anticipated debuts for the new superstars. CSL recently released figures showing average attendances are up 10% year on year with the league ranking 5th globally. In 2016, total attendance figures reached 5.8m. The increased investment is set to make 2017 the biggest CSL season yet.

China overtakes eurozone as world’s biggest bank system Status reflects global influence but also reliance on debt to fuel economy

FT

China’s banking system has surpassed that of the eurozone to become the world’s largest by assets, a sign both of the country’s increased influence in world finance and its reliance on debt to drive growth since the global financial crisis.

While China’s gross domestic product surpassed the EU’s economic bloc in 2011 at market exchange rates, its banking system did not take over the top spot until the end of 2016, Financial Times analysis shows. 

The lag reflects Beijing’s increased “financial deepening” — the term for the growth of a country’s financial system relative to gross domestic product. This has been fuelled by an extraordinary increase in bank lending since 2008, when the government unleashed aggressive monetary and fiscal stimulus to buffer the impact of the global crisis. 

“The massive size of China’s banking system is less a cause for celebration than a sign of an economy overly dependent on bank-financed investment, beset by inefficient resource allocation, and subject to enormous credit risks,” said Eswar Prasad, economist at Cornell University and former China head of the International Monetary Fund. 

Chinese bank assets hit $33tn at the end of 2016, versus $31tn for the eurozone, $16tn for the US and $7tn for Japan. The value of China’s banking system is more than 3.1 times the size of the country’s annual economic output, compared with 2.8 times for the eurozone and its banks.

World leaders and economists lauded China’s stimulus at the time for helping to stabilise global growth at a time when developed countries were deep in recession. Now, however, the stimulus is seen as leading to significant wasteful investment, industrial overcapacity and dangerous debt levels. 

Analysts note that unlike in developed markets, Chinese local governments have relied heavily on bank loans to finance infrastructure. Unlisted, state-owned policy banks — notably China Development Bank, with assets of more than $2tn — play a central role, while commercial banks also participate. 

“There’s a lot of hidden sovereign credit within the corporate loans on bank balance sheets, which can distort the picture when you do a cross-country comparison,” said Hou Wei, China banks analyst at Sanford C Bernstein in Hong Kong. “In most other markets, governments just borrow directly from capital markets. In China, it’s a unique situation.”

But in other respects, the headline figures understate the true scale of Chinese banks. Shadow banking has exploded since 2010. While ostensibly off-balance-sheet, most of this credit remains closely linked to commercial banks. The central bank warned last month that the distinction between on- and off-balance-sheet assets is often hazy due to the prevalence of implicit guarantees. Banks have frequently provided bailouts for off-balance-sheet products, even where no legal obligation exists.

In recent weeks, top leaders have signalled that they intend to shift policy focus away from stimulus towards risk control. But concrete action is still lacking. The flow of broad credit hit a new record in January. 

In addition to controlling overall debt growth, economists say more developed capital markets can help diversify China’s financial system away from banks. The heavy reliance on banks is partly the result of tight regulation of stock and bond issuance. For the Communist party, however, a more diversified financial system reduces its ability to manage money flows. 

“The Chinese government’s ambivalent approach to financial markets — seeing them as a useful resource-allocation mechanism but unwilling to let them operate freely, with the ostensible aim of maintaining stability and control — has often added to market volatility and made them less efficient,” said Mr Prasad.

JD.com to sell its stake in JD Finance for US$2.1b to unnamed buyer

SCMP
JD.com, China’s second largest e-commerce player after Alibaba Group, has agreed to sell its finance arm as part of a spin-off deal that potentially creates the biggest rival to billionaire Jack Ma Yun’s Ant Financial.

The Nasdaq-listed JD.com said on Thursday it agreed to sell all of its equity stake of 68.6 per cent in the rapidly growing JD Finance in exchange for 14.3 billion yuan (US$2.1 billion) in cash. JD will get 40 per cent of the finance arm’s future pretax profit and it has reserved the right to swap this for 40 per cent of the finance unit’s equity, subject to applicable regulatory approvals.

Under the deal, Richard Liu Qiangdong, chairman and chief executive of the Beijing-based company, will take about 4.3 per cent of the unit, but maintain a majority of voting rights through proxy agreements.

JD. com didn’t reveal the buyer of its finance unit, which offers online financial services such as small loans and wealth management to small businesses and individuals, similar to what Alibaba-backed Ant Financial offers. The transaction is expected to close in mid 2017, the company said in a statement.

The deal was announced on Thursday as JD.com reported better-than-expected fourth quarter revenue for 2016. “The transactions of JD Finance have grown more than eight times over the past three years, exceeding 1 trillion yuan in 2016. We aim to make JD Finance one of the top three fintech companies in the world by 2020, serving thousands of financial institutions and millions of enterprises,” Liu said at the company’s annual meeting in early February.

The spinoff of JD Finance has been anticipated by the market, with speculation that JD was eyeing a listing of its finance arm in 2020.

JD Finance was ranked No 10 globally in KPMG’s 2016 Fintech 100 list.

China Market Update-27FEB2017

Dan Collins on Russia Today-23FEB17

The trade war with China that America has already lost.

Global Investors Preparing for Withdrawal of Central Bank Liquidity

China’s Military Reaching Parity with the U.S.

China accounted for a third of Asia’s military spending in 2016 and was looking to sell more arms abroad, the International Institute for Strategic Studies (IISS) said in a report on Tuesday.

China’s overall defense budget last year was $145 billion (137 billion euros), 1.8 times higher than South Korea and Japan combined. China’s spending was topped only by the United States which spent $604.5 billion (572 billion euros) on defense in 2016.

On air power, China “appears to be reaching near-parity with the West,” IISS said, adding that Chinese-made drones had been seen in Nigeria and Saudi Arabia.
Its sales in Africa had moved beyond Soviet-era designs to exports of systems designed in China itself, the think tank’s report found.

China’s air force had introduced a “highly capable” short-range missile in a class only a handful of leading aerospace nations had been able to develop, it added.

Additionally, China’s long range air-to-air missile seen on exercise last year posed a risk for aircraft tankers and AWACS surveillance aircraft that previously loitered safe out of range.
Given China’s advances Western dominance “can no longer be taken for granted,” said IISS director John Chipman.

Don’t Smell That Rag! State Directed Murder of Fatty Kim’s Elder Brother Caught on Camera

China Relaxes Curbs on Stock-Index Futures Trading

Caixin
By Zhu Liangtao and Han Wei

(Beijing) – China relaxed rules on transaction size and trading costs for stock-index futures in a move to revive the market after harsh restrictions brought trading almost to a halt after the 2015 market meltdown.

The China Financial Futures Exchange (CFFEX) said on its website late Thursday that it will reduce trading commissions, lower margin deposits for non-hedging accounts and double the daily cap for opening new positions beginning Friday.

The easing of controls on stock-index futures signals that China’s stock market has returned to normal, said Li Daxiao, chief economist at Shenzhen-based Yingda Securities, on social media. Stock-index futures provide a tool for investors to hedge against risk while helping to rationalize market prices, he said.

In its statement, the CFFEX said it would adjust trading rules “in a gradual and orderly” manner. The exchange also said it would continue reining in excessive market speculation, enhancing cross-market supervision, cracking down on illegal trading and strengthening risk education among futures market investors.

For index futures linked to the CSI 300 Index and SSE 50 Index, the CFFEX will lower margin requirements for non-hedging accounts to 20% from 40%. The requirement for small-cap CSI 500 futures will drop to 30% from 40%, according to the statement.

The limit on new position opening for non-hedging accounts will double from 10 to 20 per day. Anything above that would be considered “abnormal” trading activity and be subject to penalties.

The exchange said it would also cut trading commissions for contracts opened and settled on the same day to 0.092% of transaction value from the previous 0.23%.

A fund manager said investors have been expecting the news and the easing of restrictions will encourage trading.
Although trading limits remain, several futures industry sources said the adjustments are positive signals for a revival of the stock-index futures market.

The announcement came about 18 months after stock-index futures became the target of a crackdown as regulators questioned whether futures derivatives trading exacerbated the 2015 stock market crash. China’s stock market lost more than 40% of its value in the collapse.
In August and September 2015, the CFFEX introduced new rules requiring all investors trading stock-index futures — whether they were doing so to hedge risk or not — to increase deposits with brokers from 10% to 40% of contract value. Commission charges for daily purchases and sales were raised from 0.015% of transaction values to 0.23%. Also, the daily cap of 10 new positions was imposed.

The rules were the harshest since the introduction of stock-index futures by the China Securities Regulatory Commission in 2010. Trading in index futures linked to the CSI 300 in June 2016 dropped by 99.5% from the June 2015 level, according to the CFFEX. Trading volume of futures linked to the SSE 50 fell by 99.3%, and CSI 500 futures, by 97.4% compared with a year earlier.

Several sources with knowledge told Caixin in late January that regulators were considering unwinding the limitations on index futures trading after investigations failed to find evidence that such derivatives worsened the crash.
Contact reporter Han Wei (weihan@caixin.com)

Mongolia bailed out to the tune of $1,600 per person.

China Market Update