10 Markets Thursday August 10, 2017szdaily.sznews.com/attachment/pdf/201708/10/2d4e0f... · 10...
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10 ❘ Markets CONTACT US AT: 8351-9531, [email protected] Thursday August 10, 2017 Chinese RMB 100 Hong Kong dollars 85.72 100 U.S. dollars 670.75 100 Japanese yen 6.0938 100 Euros 788.6 100 British pounds 870.97 100 Swiss francs 689.5 100 Canadian dollars 529.4 100 Australian dollars 529.46 100 Singapore dollars 491.9 Hong Kong dollar 7.8165 Japanese yen 109.89 Euro 0.8509 British pound 0.7685 Swiss franc 0.9674 Canadian dollar 1.2682 Australian dollar 1.2691 Singapore dollar 1.3625 U.S. dollar Shanghai Composite Index Shanghai B Shenzhen Component Index Shenzhen B Last 336.24 Open 334.84 High 336.26 Low 334.61 Change 0.44% Last 10,544.59 Open 10,487.77 High 10,548.06 Low 10,455.27 Change 0.46% Last 1,179.98 Open 1,179.21 High 1,180.98 Low 1,177.93 Change 0.08% Last 3,275.57 Open 3,277.81 High 3,277.94 Low 3,263.85 Change -0.19% Exchange Rates (Wednesday) Stock Indices (Wednesday) Workers at a steel plant of Shandong Iron & Steel Group in Jinan, Shandong Province, in this file photo. The government has summoned regulators, a major exchange and steel company executives to a meeting yesterday to discuss steel prices, sources familiar with the matter said. SD-Agencies THE government has summoned regulators, a major exchange and steel company executives to a meeting yesterday to discuss steel prices, sources familiar with the matter said, as a surge in markets due to output cuts draws scrutiny from authorities. The meeting, to be hosted by the National Development & Reform Commission (NDRC), will discuss futures and physical steel prices, an official at China Iron and Steel Association (CISA) said, speaking on condi- tion of anonymity. The move comes after steel rebar futures prices soared by two-thirds since the start of the year, with investors betting supply will tighten as the gov- ernment forces outdated, pol- luting factories to close ahead of winter. The closures are part of its war on smog and a drive to make industry more efficient. Officials from the Ministry of Industry and Information Technology, China Securities Regulatory Commission, CISA, Shanghai Futures Exchange and some leading companies have been called to attend, the CISA official said. A second industry insider con- firmed he will be at the meeting, but declined to be identified or provide more details. The NDRC and the bodies invited to the gathering did not respond to requests for comment on the meeting. This week, the Ministry of Environmental Protection has embarked on its fourth round of environmental inspections across eight provinces and regions, including Shandong, to check on factories’ progress in curbing pollution. (SD-Agencies) Regulators, bourse discuss steel price surge FANGDA Carbon New Material Co. isn’t typically a name that jumps to mind when one thinks of the world’s most-actively traded stocks. Yet for reasons unknown, shares of this obscure Shang- hai-listed maker of graphite electrodes are suddenly changing hands at a pace usually reserved for the global equity market’s creme de la creme. On Friday, Fangda Carbon was the 11th most-traded common stock in the world, despite a middling US$8.4 billion market capitalization that failed to crack the global top 1,500. Its turnover exceeded that of JPMorgan Chase & Co., which has a market value of US$331 billion, and came within strik- ing distance of Microsoft Corp., a US$558 billion behemoth. The flurry of activity, which coincided with a nearly 200 percent rally in Fangda Carbon’s shares since late June, is all the more extraordinary given the sleepy state of China’s stock exchanges this year. Volatility readings in the US$7.1 trillion market are near the lowest levels since the early 1990s, while turn- over has dropped about 80 per- cent from peak levels in 2015. Unsurprisingly, authorities have taken notice. The Shang- hai Stock Exchange issued writ- ten warnings to some investors after observing unusual trading behavior in Fangda Carbon last week, according to people famil- iar with the matter. Regulators are on high alert for suspicious trading activity in the world’s second-biggest stock market after Liu Shiyu, chairman of the China Securities Regula- tory Commission (CSRC), vowed to crack down on misbehavior in the wake of a US$5 trillion equity crash two years ago. The CSRC collected 6.4 bil- lion yuan (US$955 million) in penalties from market partici- pants in the first six months of the year, exceeding the total from all of 2016. Some of Fangda Carbon’s recent gains may have been driven by the company’s July 24 announcement that preliminary first-half net income surged 26- fold. Still, the earnings release doesn’t explain why shares jumped before the results were made public, nor does it make clear why the surge in volume lasted so long. Instead of dissi- pating in the days after Fangda Carbon’s announcement, turn- over kept rising through Friday. That trading session was par- ticularly volatile. After climbing as much as 8.9 percent, the stock tumbled suddenly in the final hour of trading to close with a 7.1 percent loss. A record 10.3 billion yuan in shares changed hands, up from the 914 million yuan average over the past year. While the broader market expe- rienced a similar price reversal, its move was much more sub- dued. The Shanghai Composite Index ended Friday with a drop of 0.3 percent. In its written warning, the Shanghai Stock Exchange said it would take disciplinary action if the unusual trading in Fangda Carbon persists. Steps the exchange might take include restricting certain investors’ accounts or labeling them as unqualified investors, said the sources. Brokerages were ordered by the bourse to closely moni- tor transactions in the related accounts, the sources said. It’s possible that the company has become a target of specula- tive traders because its products can be used to help charge electric car batteries, a technology that’s gotten a boost from government subsidies, according to Yin Ming, vice president of Shanghai-based investment firm Baptized Capi- tal. He said such trading frenzies are common in China, where individual investors drive more than 80 percent of volume on local stock exchanges. Data from China’s cross- market exchange link shows overseas investors joined in on the action, too. Fangda Carbon was among the 10 most-actively traded shares through the Shanghai-Hong Kong market link Friday. (SD-Agencies) Stock of obscure fi rm trades more than JPMorgan CREDITORS of Dongbei Special Steel Group Co. (Dongbei Steel) have approved a draft plan to restructure the stricken north- eastern Chinese steelmaker, the company said. An official with the com- pany’s public relations office said Tuesday the plan was passed at a creditors’ meeting Tuesday morning. He gave no further details. People with direct knowledge of the matter said the plan was approved by more than 80 per- cent of the 429 creditors attend- ing the meeting. Under the terms of the agree- ment, creditors owed more than 500,000 yuan (US$75,000) can either convert their debt to equity or be repaid 22.09 percent in cash. Creditors owed less than 500,000 yuan will be paid in full, the people said. The plan was submitted to the court in Dongbei’s home city of Dalian last month, Xinhua reported at the time. The government has been urging struggling State-owned enterprises to convert debt to equity after introducing new guidelines last year. According to the most recent data, the total liabilities of State firms reached 94.13 trillion yuan as at the end of June, up 11.4 percent compared with the same period of last year. Critics have expressed concern that debt-to-equity programs offer a lifeline to so-called zombie firms and saddle banks with low-quality assets. How- ever, the government has said only viable firms experiencing temporary difficulty qualify for such programs. Dongbei Steel is the parent of Shenzhen-listed Fushun Special Steel Co. and is owned by the provincial government of Liaoning in China’s north- eastern rustbelt. The firm entered into formal bankruptcy proceedings in October aimed at recovering a reported US$10 billion in debt. It defaulted on nine separate bonds last year. Its first bond default in late March last year helped trigger a sharp sell-off in the domestic corporate debt mar- kets as investors reassessed the likelihood of bailouts for key pro- vincially-owned state enterprises, especially in coal and steel sectors hobbled by overcapacity. Regulators said earlier this year that the total credit expo- sure of banks to Dongbei Steel amounted to 44 billion yuan. China’s biggest privately owned steelmaker, Jiangsu Shagang Co., last month said it expected to be the biggest shareholder in Dongbei Steel once restructur- ing had been completed. (SD-Agencies) Restructuring plan of Dongbei Steel gets nod
Transcript of 10 Markets Thursday August 10, 2017szdaily.sznews.com/attachment/pdf/201708/10/2d4e0f... · 10...
10 x MarketsCONTACT US AT: 8351-9531, [email protected]
Thursday August 10, 2017
Chinese RMB
100 Hong Kong dollars 85.72 100 U.S. dollars 670.75 100 Japanese yen 6.0938 100 Euros 788.6 100 British pounds 870.97100 Swiss francs 689.5100 Canadian dollars 529.4 100 Australian dollars 529.46 100 Singapore dollars 491.9
Hong Kong dollar 7.8165 Japanese yen 109.89Euro 0.8509 British pound 0.7685 Swiss franc 0.9674 Canadian dollar 1.2682 Australian dollar 1.2691 Singapore dollar 1.3625
U.S. dollar
Shanghai Composite Index
Shanghai B
Shenzhen Component Index
Shenzhen B
Last 336.24 Open 334.84 High 336.26 Low 334.61 Change 0.44%
Last 10,544.59 Open 10,487.77 High 10,548.06 Low 10,455.27 Change 0.46%
Last 1,179.98 Open 1,179.21 High 1,180.98 Low 1,177.93 Change 0.08%
Last 3,275.57 Open 3,277.81 High 3,277.94 Low 3,263.85 Change -0.19%
Exchange Rates (Wednesday)
Stock Indices (Wednesday)
Workers at a steel plant of Shandong Iron & Steel Group in Jinan, Shandong Province, in this fi le photo. The government has summoned regulators, a major exchange and steel company executives to a meeting yesterday to discuss steel prices, sources familiar with the matter said. SD-Agencies
THE government has summoned regulators, a major exchange and steel company executives to a meeting yesterday to discuss steel prices, sources familiar with the matter said, as a surge in markets due to output cuts draws scrutiny from authorities.
The meeting, to be hosted by the National Development & Reform Commission (NDRC), will discuss futures and physical steel prices, an offi cial at China Iron and Steel Association (CISA) said, speaking on condi-tion of anonymity.
The move comes after steel
rebar futures prices soared by two-thirds since the start of the year, with investors betting supply will tighten as the gov-ernment forces outdated, pol-luting factories to close ahead of winter. The closures are part of its war on smog and a drive to make industry more effi cient.
Offi cials from the Ministry of Industry and Information Technology, China Securities Regulatory Commission, CISA, Shanghai Futures Exchange and some leading companies have been called to attend, the CISA offi cial said.
A second industry insider con-fi rmed he will be at the meeting, but declined to be identifi ed or provide more details.
The NDRC and the bodies invited to the gathering did not respond to requests for comment on the meeting.
This week, the Ministry of Environmental Protection has embarked on its fourth round of environmental inspections across eight provinces and regions, including Shandong, to check on factories’ progress in curbing pollution.
(SD-Agencies)
Regulators, bourse discuss steel price surge
FANGDA Carbon New Material Co. isn’t typically a name that jumps to mind when one thinks of the world’s most-actively traded stocks.
Yet for reasons unknown, shares of this obscure Shang-hai-listed maker of graphite electrodes are suddenly changing hands at a pace usually reserved for the global equity market’s creme de la creme.
On Friday, Fangda Carbon was the 11th most-traded common stock in the world, despite a middling US$8.4 billion market capitalization that failed to crack the global top 1,500.
Its turnover exceeded that of JPMorgan Chase & Co., which has a market value of US$331 billion, and came within strik-ing distance of Microsoft Corp., a US$558 billion behemoth.
The fl urry of activity, which coincided with a nearly 200 percent rally in Fangda Carbon’s shares since late June, is all the more extraordinary given the sleepy state of China’s stock exchanges this year. Volatility readings in the US$7.1 trillion market are near the lowest levels since the early 1990s, while turn-over has dropped about 80 per-cent from peak levels in 2015.
Unsurprisingly, authorities have taken notice. The Shang-hai Stock Exchange issued writ-ten warnings to some investors after observing unusual trading
behavior in Fangda Carbon last week, according to people famil-iar with the matter.
Regulators are on high alert for suspicious trading activity in the world’s second-biggest stock market after Liu Shiyu, chairman of the China Securities Regula-tory Commission (CSRC), vowed to crack down on misbehavior in the wake of a US$5 trillion equity crash two years ago.
The CSRC collected 6.4 bil-lion yuan (US$955 million) in penalties from market partici-pants in the fi rst six months of the year, exceeding the total from all of 2016.
Some of Fangda Carbon’s recent gains may have been driven by the company’s July 24 announcement that preliminary fi rst-half net income surged 26-fold. Still, the earnings release doesn’t explain why shares jumped before the results were made public, nor does it make clear why the surge in volume lasted so long. Instead of dissi-pating in the days after Fangda Carbon’s announcement, turn-over kept rising through Friday.
That trading session was par-ticularly volatile. After climbing as much as 8.9 percent, the stock tumbled suddenly in the fi nal hour of trading to close with a 7.1 percent loss. A record 10.3 billion yuan in shares changed hands, up from the 914 million yuan average over the past year.
While the broader market expe-rienced a similar price reversal, its move was much more sub-dued. The Shanghai Composite Index ended Friday with a drop of 0.3 percent.
In its written warning, the Shanghai Stock Exchange said it would take disciplinary action if the unusual trading in Fangda Carbon persists. Steps the exchange might take include restricting certain investors’ accounts or labeling them as unqualifi ed investors, said the sources. Brokerages were ordered by the bourse to closely moni-tor transactions in the related accounts, the sources said.
It’s possible that the company has become a target of specula-tive traders because its products can be used to help charge electric car batteries, a technology that’s gotten a boost from government subsidies, according to Yin Ming, vice president of Shanghai-based investment fi rm Baptized Capi-tal. He said such trading frenzies are common in China, where individual investors drive more than 80 percent of volume on local stock exchanges.
Data from China’s cross-market exchange link shows overseas investors joined in on the action, too. Fangda Carbon was among the 10 most-actively traded shares through the Shanghai-Hong Kong market link Friday. (SD-Agencies)
Stock of obscure fi rm trades more than JPMorgan
CREDITORS of Dongbei Special Steel Group Co. (Dongbei Steel) have approved a draft plan to restructure the stricken north-eastern Chinese steelmaker, the company said.
An official with the com-pany’s public relations office said Tuesday the plan was passed at a creditors’ meeting Tuesday morning. He gave no further details.
People with direct knowledge of the matter said the plan was approved by more than 80 per-cent of the 429 creditors attend-ing the meeting.
Under the terms of the agree-ment, creditors owed more than 500,000 yuan (US$75,000) can either convert their debt to equity or be repaid 22.09 percent in cash. Creditors owed less than 500,000 yuan will be paid in full, the people said.
The plan was submitted to the court in Dongbei’s home city of Dalian last month, Xinhua reported at the time.
The government has been urging struggling State-owned enterprises to convert debt to equity after introducing new guidelines last year.
According to the most recent data, the total liabilities of State fi rms reached 94.13 trillion yuan as at the end of June, up 11.4 percent compared with the same period of last year.
Critics have expressed concern that debt-to-equity programs offer a lifeline to so-called zombie fi rms and saddle banks with low-quality assets. How-ever, the government has said only viable fi rms experiencing temporary diffi culty qualify for such programs.
Dongbei Steel is the parent of Shenzhen-listed Fushun Special Steel Co. and is owned by the provincial government of Liaoning in China’s north-eastern rustbelt.
The fi rm entered into formal bankruptcy proceedings in October aimed at recovering a reported US$10 billion in debt. It defaulted on nine separate bonds last year. Its fi rst bond default in late March last year helped trigger a sharp sell-off in the domestic corporate debt mar-kets as investors reassessed the likelihood of bailouts for key pro-vincially-owned state enterprises, especially in coal and steel sectors hobbled by overcapacity.
Regulators said earlier this year that the total credit expo-sure of banks to Dongbei Steel amounted to 44 billion yuan. China’s biggest privately owned steelmaker, Jiangsu Shagang Co., last month said it expected to be the biggest shareholder in Dongbei Steel once restructur-ing had been completed.
(SD-Agencies)
Restructuring plan ofDongbei Steel gets nod
