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Investors and traders in China’s main financial district are talking about the following before the start of trade today.
In economic news, China’s current account surplus dropped in the first quarter from a year ago to $29.8 billion, a possible signal that growth in the country may be easing. HSBC said earlier this week that it’s Purchasing Managers’ Index fell to a 10-month low in May.
In overnight U.S. trading, shares in e-commerce company Mecox Lane plunged by 27% after it reported a wider loss and decline in revenue in the first quarter from a year earlier. Sales fell 2.4% to $3.9 million; the company’s loss widened to $3.9 million from $1.5 million.
Among other U.S.-traded China shares, Nasdaq-listed travel agent Ctrip may be in the news today. Senior executives will be hosting a visit by the Shanghai Foreign Correspondents Club.
A crackdown by authorities on illegal confiscation of land by local government officials working closely with real estate developers is continuing. The 21st Century Business Herald reported today that projects in the city of Xianhe in Hebei Province being developed by China Vanke and others have been halted following a probe into wrongdoing.
What local media are calling the worst drought to hit the Yangtze River in a half a century may be starting to affect China’s economy. Shanghai-listed power concern China Yangtze Power reportedly said its operations may be harmed in the short term by the dramatic shortage of rain. Media have also reported that overall power shortages in China this summer may lead to higher prices for energy-heavy industries such as steel. The Securities Times, citing the National Bureau of Statistics, reported today that prices of leafy vegetable rose by more than 10% in May 11-20 compared with first ten days of the month.
Changes in top posts in well-known companies are in the news today. Sportswear maker Li Ning , a rival of Nike in China, fell 8% yesterday at the Hong Kong Stock Exchange after it said three top executives were leaving the struggling Chinese company. Two large multinationals will also have new faces in high positions in China. Sean Maloney, one of the company’s most senior Asia hands, will become chairman of Intel China. And Wal-Mart will replace its CFO and COO in the country, possibly in connection with a planned merger with Taiwan-controlled Trust-Mart that didn’t work out well, the 21Century Daily Herald said today.
In other news involving foreign companies, Ford Motor may be looking to enter the heavy truck market in China through a joint venture, the 21stCentury Daily Herald reported today. Ford has already reached an agreement with China Chang’an Automobile Group to form a joint venture that would take over its subsidiary Taiyuan Chang’an Heavy Vehicles. The two are still negotiating the details.
Investors looking for ways to benefit of growth can also consider looking at shares in Taiwan, which is a big supplier to China. In an interview, John Brebeck, head of Yuanta Investment Consulting, a research arm of one of Taiwan’s largest brokerages, says companies that sell automation equipment should benefit from rising labor costs. See full story here.
–With Maggie Chen
source: forbes.com
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