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Yangtze RiverMake Money Blog$, Investors and traders in China’s main financial district are talking about the following before the start of trade today.
China shares may be mixed today as continued worries about tight monetary policy and other government policies offset relatively upbeat underlying economic news.
Continuing concerns about inflation are spelled out in a front-page article in the China Business News today. Drought in the lower Yangtze River is spurring higher prices for vegetables and creating a “butterfly effect” of price pressure. Against that backdrop, the government isn’t showing any sign relenting on real-estate-market tightening. Nie Meisheng, president of China Real Estate Chamber of Commerce, said yesterday China’s real estate prices may drop by an average 10% this year, according to reports. Nie also said property developers are facing tight cash flows. The silver lining to tight market conditions in real estate may be that developers are looking to differentiate their products, creating new business for interior decorators and architects (see story here).
The China Securities Regulatory Commission, which has said previously it isn’t encouraging backdoor listings by property companies, said over the weekend it would make an exception. In a long expected step, Shenzhen-listed Chongqing Dong Yuan Industry Development was given approval to merge with Chongqing Jinke Group, one of the city’s largest property developers. Huang Hongyun and his wife ranked no. 309 on the 2010 China Rich List with wealth of $525 million.
Shares among China’s auto stocks fell on Friday after state media published a survey that suggested slower industry growth prospects in the second half. Among the decliners, Chongqing Changan Automobile, an affiliate of Ford, lost 1.8% Fast growth has made the country the world’s no. 1 auto market in recent years; global manufacturers such as Ford and GM have invested heavily.
In news about companies involved in wrongdoing, top executives at Wuliangye Yibin, a rice wine supplier that was a member of the 2011 Forbes Global 2000 List, has been hit with fines for failing to property disclose financial information. Wuliangye didn’t release news about its investment in Zhongke Securities in a timely or complete manner, nor did it correct errors in its 2007 annual report in timely way. It also failed to disclose legal proceedings against a company director. Eight senior managers including chairman Tang Qiao and ex-chairman Wang Guochun were fined 600,000 yuan in total, according to reports.
In U.S. trading, shares in Home Inns of Shanghai soared by 8.5% on Friday after the company said it would buy rival economy hotel chain Shanghai Motel Management for about $470 million of cash and shares from Morgan Stanley. Shares in Ctrip, a Nasdaq-listed online travel booking company which owns 17.6% of Home Inns, rose by 2.7%.
China will have one new stock listing today: Joeone (601566), a men’s business and casual wear brand China. Three companies will list tomorrow: Ingenic Semiconductor (300223), automotive paint supplier Shanghai Kinlita Chemical (300225), and magnetic products maker Yantai Zhenghai Magnetic Material (300224), whose clients include Xinjiang Goldwind Science& Technology, BYD, Gree Electric Appliances and Mitsubishi Electric.
Finally, in news from the the retail industry, Shanghai-listed Nanjing Xinjiekou Department Store said on Saturday controlling shareholder Roger Wang may reduce his holding in the company. Wang, a U.S. citizen, ranked no. 254 on the 2011 Forbes Billionaires List with wealth of $4.2 billion. The company gained 5% last Friday.
–With Maggie Chen
source: forbes.com
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