Shanghai Daily Business
Updated: 25 sec ago
Electric or hybrid vehicles accounted for more than half of all new cars sold in Norway last year, official data showed yesterday, confirming the country's pioneering role in carbon-free transport. Zero-emission, mainly all-electric as well as a few hydrogen-powered cars, accounted for 20.9 percent of total sales in 2017, while hybrid vehicles accounted for 31.3 percent, the OFV Advisory Council for Road Traffic calculated.That represents an increase over the previous year, when zero-emission and hybrid cars accounted for 15.7 percent and 24.5 percent respectively of total sales.Norway, the biggest producer of oil in western Europe, has set itself the ambitious goal of no longer selling new cars with a combustion engine by 2025.Unlike heavily taxed diesel or gasoline cars, electric cars benefit from a very generous tax system making their purchase prices relatively competitive.Their owners also enjoy many privileges such as free city tolls, ferries, parking and recharging in public car parks as well as having the right to drive in bus lanes.Authorities plan to gradually reduce some measures whose benefits and costs are disputed by critics.
China's auto sales are set to drop in January from December last year on weak consumer demand and an increase in the vehicle purchase tax, according to a survey published by China Automobile Dealers Association yesterday.Around 42.5 percent of car dealers expected consumer demand to fall in January compared with December while 35.6 percent of them believed demand would stay flat and 21.8 percent said demand would increase, the survey revealed.The association blamed the decline to an increase in the purchase tax for vehicles with engines below 1.6 liters. The Ministry of Finance has raised the purchase tax of small-engine vehicles from 7.5 percent last year to 10 percent this year.Car dealers are eying lukewarm operating conditions generally in January as the survey revealed that 60.3 percent of the dealers expect normal operating conditions this month while 27 percent believe theirs will perform well and 12.6 percent see poor conditions.
CHINA’S central bank told a top-level government Internet finance group that the monetary authority can tell local governments to regulate the power usage of Bitcoin miners to gradually reduce the scale of their production, a source said.
While the People’s Bank of China can’t directly regulate Bitcoin miners’ power usage, it can ask local authorities to do so, the central bank told members of the Leading Group of Beijing Internet Financial Risks Remediation at the end of 2017, the source said. Experts say China is one of the world’s biggest sources of Bitcoin mining, where miners solve complex mathematical puzzles with computers in order to be awarded virtual coins. The intensive use of computers for Bitcoin mining has boosted demand for electricity.
LAND sales increased in Chinese cities last year as the government moved to cool the market with higher supply, according to the China Index Academy, a property research organization.
Land sales in 300 Chinese cities rose 8 percent from 2016 to 950.36 million square meters in 2017, while sales of land for residential projects jumped 24 percent year on year to 354.33 million square meters.
Land sales in major cities like Beijing, Shanghai and Guangzhou were particularly robust, as local governments increased land supply to cool runaway house prices which were fueled by huge demand and limited supply.
In China’s first-tier cities, land sales jumped 46 percent year on year to 29.79 million square meters last year, according to the academy.
Boosted by surging sales, revenue from land transactions rose 36 percent to 4.01 trillion yuan (US$620 billion) in 300 Chinese cities.
China’s property market — that was once deemed a major risk for the broader economy — cooled in 2017 amid tough curbs such as purchase restrictions and increased downpayment requirements as the government sought to rein in speculation.
Due to these efforts, both investment and sales in China’s property sector slowed. Real estate investment rose 7.5 percent year on year during January to November, a drop from 7.8 percent in the first 10 months.
Property sales in terms of floor area climbed 7.9 percent in the first 11 months, retreating from 8.2 percent in January-October.
With the market holding steady, Chinese authorities are aiming for a “long-term mechanism” for real estate regulation, and a housing system that ensures supply through multiple sources and encourages both housing purchases and rentals.
A report from the National Academy of Economic Strategy predicted that the country’s property market would remain stable in 2018 if there were no major policy shocks.
PAKISTAN will allow the yuan to be used for imports, exports and financing transactions for bilateral trade and investment activities, in a move economists said yesterday would simplify a massive Chinese investment project.
Both public and private sector enterprises may use the yuan for bilateral trade and investment, the central State Bank of Pakistan said in a statement issued on Tuesday.
“As per current foreign exchange regulations, Chinese Yuan is an approved foreign currency for denominating foreign currency transactions in Pakistan,” it said.
“In terms of regulations in Pakistan, CNY is at par with other international currencies such as USD, Euro and JPY,” it added.
The central bank said that in light of a massive Chinese infrastructure project in Pakistan, the move would “yield long-term benefits for both the countries.”
The China-Pakistan Economic Corridor, a US$54 billion project launched in 2013 linking western China to the Indian Ocean via Pakistan, has been hailed as a “game changer” by Pakistani officials.
They hope the power stations and transmission lines built as part of the project will help ease Pakistan’s chronic power crisis.
Economic analyst and former government adviser on finance Salman Shah welcomed the State Bank’s move, saying that avoiding dollar transactions in the implementation of CPEC would “simplify matters very considerably”.
The Chinese economy is now one of the biggest in the world, he said, justifying the use of the yuan.
CHINA’S shares closed yesterday higher, after firms linked to the Xiongan New Area as well as aviation and communications stocks made strong gains.
The Shanghai Composite Index added 0.62 percent, or 20.78 points, yesterday to close at 3,369.11.
The Shenzhen Component index rose 0.91 percent, or 102.25 points, to 1,1280.30, and the Nasdaq-style ChiNext jumped 1.45 percent to 1,795.38.
Stocks related to the Xiongan New Area advanced broadly, with around 30 shares rising by the maximum daily cap of 10 percent, including Jiangsu Zhongshe Group Co Ltd, an engineering consultancy, which ended at 51.61 yuan and Shenzhen-listed Tianjin Keyvia Electric Co Ltd.
THREE provinces and one autonomous region are planning for entrusted pension investment to deal with mounting payment pressure, a social security official said yesterday.
Gansu, Zhejiang and Jiangsu provinces as well as Tibet Autonomous Region are considering entrusting some of their pension funds, totaling 150 billion yuan (US$23.05 billion), to the National Council for Social Security Fund to be invested professionally, said Tang Xiaoli, an official of the Ministry of Human Resources and Social Security.
China is facing increasing pension payment pressure due to the acceleration of economic restructuring and an aging population, requiring new ways to bolster the funds’ value, Tang said.
Pension investment is a major way to preserve and increase fund value, and nine provinces have entrusted about 430 billion yuan to the NCSSF to be invested professionally.
China has about 4 trillion yuan in its pension fund balance, and more provinces should be encouraged to try entrusted investment, Tang said.
SWISS global financial services company UBS expects China’s December data will show steady economic activity, while GDP growth in the fourth quarter will slow slightly.
The Swiss company predicted stable industrial production and property activity, firm fixed-asset investment, and faster export growth in a research note yesterday. The indicators are scheduled to be released in mid-January.
“We expect December’s industrial production growth to have stabilized at 6.1 percent year on year,” UBS said.
China’s value-added industrial output, which measures factory activity, rose 6.1 percent in November, largely stable compared with earlier this year, as high-tech and equipment manufacturing sectors posted strong gains.
UBS believes stronger external demand and a rebound in power generation will help sustain industrial expansion, while noting the air quality campaign is likely to restrict northern China’s upstream sectors.
Overall FAI growth is set to rise to 6-7 percent for December, leaving the year-to-date rate at 7.2 percent, said UBS, adding that infrastructure investment is likely to hold up and manufacturing investment will be slower.
It also predicted robust export growth partly due to a low base, higher consumer prices, falling factory-gate inflation, and a stable credit increase. Foreign exchange reserves will likely rise thanks to eased capital flight pressures.
UBS projected economic growth will ease to 6.7 percent annually in the fourth quarter, and dip to 6.4 percent in 2018.
The headquarters of the music streaming service Spotify is seen in Stockholm in file photo. The music streaming company was sued by Wixen Music Publishing Inc last week for allegedly using thousands of songs without a license and compensation to the music publisher. Wixen is seeking damages worth at least US$1.6 billion along with injunctive relief.
ABOUT 10 years ago, when well-to-do Shanghai resident Gao Junqing first heard the term “private banking services,” he wasn’t sure what it meant.
“Even the client-relationship manager at my commercial bank had little idea about it when I asked her,” Gao recalled.
Private banking is an umbrella term for an array of customized services offered to wealthy people. There is no precise figure for just how rich you have to be to join this exclusive coterie, but Investopedia.com puts the minimum at US$1 million in liquid financial assets.
The asset threshold for becoming a private client of a commercial bank here has been set at 6 million yuan (US$922,069) by the China Banking Regulatory Commission.
Unlike ordinary customers, affluent clients are assigned their own account managers to give them personalized attention. The services they provide include investment management, financial advice on protecting and increasing wealth, and information on how to structure legacies for heirs.
Gao, 40, was among the first group of clients to tap private banking back in its early days. He made his money working in information technology for a multinational company and invested it wisely.
He told Shanghai Daily that he remembers his first client-relationship manager.
“She had some traditional Chinese medicine with her and explained that it was for the next client she was scheduled to see,” he said. “I was awed by such considerate service.”
The idea of private banking for the moneyed class is not really new. More than 200 years ago, Lombard Odier, the world’s first private bank, was founded in Switzerland. Over time, as more people in the world became rich, the concept of elite banking took hold.
With private wealth on the rise in China, banking catering to the well-heeled was inevitable.
That segment of financial services has “huge potential” for growth, according to the 2017 annual report released by China Merchants Bank and Bain & Co. Total investible assets of the super rich nationwide will rise by 14 percent in 2017 to 188 trillion yuan.
In the past decade, that segment surged fivefold to 165 trillion yuan in 2016, with 1.6 million people classified as super rich, the report said.
This means that about 400 “new faces” joined the high-net-worth club every day during the period, the report said.
Bet on technology
“We Chinese people are born to financial investment because we have a tradition of saving for a rainy day,” Gao said. “I started thinking about how to manage my money as early as 2002, but at that time, there were limited options and only conventional banking products available. Private banking services opened more diversified investment channels with greater convenience.”
Private banking clients enjoy discounts on financial services. For example, customers in export businesses have access to more favorable foreign-exchange rates.
Bankers, of course, are eager to court the super rich.
Bank of China, the first Chinese bank to offer private banking services in 2007, now boasts an aggregate 100,000 super-wealthy clients, with assets under management totaling 1.2 trillion yuan, Liu Qiang, vice president of the bank, told a recent gathering.
Last month, Bank of China opened a new academy dedicated to training more professionals in this expanding sector.
To ride the wealth management wave, Liu said, the bank will embrace artificial intelligence technology to enhance services to private banking clients.
Shu Wei, who made her money in the tea business and now is a private client of the bank, told Shanghai Daily that she values such quality, personalized services.
“Whenever I have some financial need, my client manager will come to my home and offer me the best advice and solutions,” she said. “Ten years ago, everybody, including me, dreamed of becoming rich overnight. We used to seek higher investment yields from the private banks, but now that’s not only thing.”
Bank of China’s global facilities help in both her business and in her personal travel, Shu said.
Tech-savvy clients like Gao want faster response times and a better quality of digital services. For him, the private banking arm of PingAn Bank has outperformed many of its peers in that regard.
Gao said there are too few qualified professionals in the private banking sector and more personalized products are badly needed. He said he hopes that big data and artificial intelligence technologies like machine learning will enable banks to provide more personalized solutions for clients.
“Machines know us better,” he said. “They can record our investment behavior and give us some early warning about possible problems. Technology can also remove some unqualified investment consultants.”
Indeed, the China Merchants Bank-Bain report predicts that digital experiences will have a “critical” impact on customer loyalty and a “revolutionary” impact on the services and operational models of wealth managers.
ANT Financial’s plan to acquire the American money transfer company MoneyGram International has collapsed.
A government panel in the United States rejected the plan over national security concerns, the most high-profile Chinese deal to be torpedoed under the administration of US President Donald Trump.
The US$1.2 billion deal’s failure represents a blow for Jack Ma, executive chairman of Chinese Internet conglomerate Alibaba Group, who owns Ant Financial together with Alibaba executives. He was looking to expand Ant Financial’s footprint amid domestic competition from rival Tencent’s WeChat payment platform.
Ant Financial and MoneyGram jointly announced the termination of the proposed takeover on Tuesday, after the Committee on Foreign Investment in the US rejected their proposals to mitigate concerns over the safety of data that can be used to identify US citizens, according to sources familiar with the confidential discussions.
“Despite our best efforts to work cooperatively with the US government, it has now become clear that CFIUS will not approve this merger,” MoneyGram Chief Executive Alex Holmes said.
The news comes almost a year after Ma met Trump, promising to bring a million jobs to the US. The personal relationship did not sway the Trump Administration. The US government has toughened its stance on the sale of companies to Chinese entities, at a time when Trump is trying to put pressure on China to help to tackle North Korea’s nuclear ambitions and be more accommodative on trade and foreign exchange issues.
The MoneyGram deal is the latest in a string of Chinese acquisitions of US firms that have failed to clear CFIUS, including the US$1.3 billion purchase by China-backed buyout fund Canyon Bridge Capital Partners of US chipmaker Lattice Semiconductor.
In November, China Oceanwide Holdings Group and Genworth Financial Inc extended a deadline to April 1 for the Chinese group’s planned US$2.7 billion takeover of the American life insurer.
In response to a question about the deal, Chinese foreign ministry spokesman Geng Shuang yesterday said cooperation on economic and trade matters was of mutual benefit.
“We hope the US can create a fair and predictable environment for Chinese enterprises to invest and start up businesses,” Geng added.
In a commentary, Xinhua news agency described a fading bonhomie between the two countries, with the US “stuck in a zero-sum mentality.”
China and the US “are about to ride a bumpy journey in trade in 2018 if the US government goes its own way, and retaliatory measures by China could be on the table,” Xinhua said.
The MoneyGram deal’s demise is also the latest example of how CFIUS’ focus on cyber security and the integrity of personal data is prompting it to block deals in sectors not traditionally associated with national security, such as financial services.
The US Treasury said it is prohibited by statute from disclosing information filed with CFIUS and declined to comment on the MoneyGram deal.
Other US financial services deals by Chinese firms are waiting for approval from CFIUS, including HNA Group’s acquisition of hedge fund-of-funds firm SkyBridge Capital from Anthony Scaramucci, the Trump administration’s former communications director.
Dallas-based MoneyGram has approximately 350,000 remittance locations in more than 200 countries and regions. Ant Financial was looking to take over MoneyGram not so much for its US presence but to expand in growing markets outside China.
Ant Financial and MoneyGram said they will now explore and develop initiatives to work together in remittance and digital payments in China, India, the Philippines and other Asian markets, as well as in the US. This cooperation will take the form of commercial agreements, one of the sources said.
Any arrangements reached by Ant Financial and MoneyGram that do not involve a transaction would not be subject to review by CFIUS.
“What is more likely to happen at this point is that MoneyGram will sell to another company, and one company that has shown interest in the past is Euronet,” said Gil Luria, an equity analyst at D.A. Davidson & Co.
Ant Financial agreed an US$18 per share all-cash deal to acquire MoneyGram in April, seeing off competition from US-based Euronet Worldwide, which had made an unsolicited offer for MoneyGram and openly lobbied US lawmakers, saying Ant’s proposal created a national security risk.
Ant Financial said it paid MoneyGram a US$30 million termination fee for the deal’s collapse.
NEW home sales stayed above the 100,000-square-meter threshold for the third consecutive week in Shanghai, despite a minor retreat as sluggish momentum extended through the end of 2017, latest market data showed.
The area of new homes sold, excluding government-subsidized affordable housing, dipped 1 percent to 124,000 square meters during the seven-day period ending on Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday.
Outlying districts continued to outperform their downtown counterparts with medium to low-end houses remaining the most sought-after properties among local buyers.
Qingpu, despite a 16.7 percent drop from the previous week, registered weekly sales of 20,000 square meters. It was closely followed by Jiading, where seven-day new home sales jumped 58.3 percent to 19,000 square meters. Baoshan, which suffered a weekly plunge of 63.3 percent, and Songjiang, which saw growth of 22.2 percent, both recorded sales of around 11,000 square meters, according to Centaline data.
The average cost of new houses rose 8.3 percent from the previous week to 52,213 yuan (US$8,018) per square meter. Eight of the 10 most sought-after projects cost between 30,000 yuan per square meter and 50,000 yuan per square meter.
“Weekly sales of new homes barely managed to stay above 120,000 square meters while the most popular project sold less than 50 units, evidence that weak sentiment continued to dominate the market which often records a major rebound at the end of a month,” said Lu Wenxi, senior manager of research at Shanghai Centaline. “The slack momentum will probably extend further as the beginning of a year is usually a low season for property sales.”
A housing project in Chongming District became the best-selling development after selling 5,502 square meters, or 49 units, for an average 36,295 yuan per square meter.
It was trailed by a Shui On Land project in central Hongkou District which sold 3,358 square meters, or 15 apartments, for an average price of 103,457 yuan per square meter.
The monthly statistics show new home buying sentiment recovered in Shanghai for the second straight month in December with average cost rising again amid stable performance in the medium-end housing segment.
Around 467,000 square meters of new homes, excluding government-funded affordable housing, were sold across the city in December, a month-over-month increase of 24.9 percent, Shanghai Centaline Property Consultants Co said in a report released yesterday. On an annual term, that represented a drop of 28 percent. The average price of the new homes rose 1.3 percent from November to 49,648 yuan (US$7,624) per square meter, a historic high in the city.
“Out of the 10 most popular projects, eight cost between 30,000 yuan per square meter and 60,000 yuan per square meter, suggesting continuing strong demand from first-time upgraders,” said Lu Wenxi, senior manager of research at Shanghai Centaline. “That was also true on the supply side as a majority of the new homes launched last month cost between 30,000 yuan per square meter and 50,000 yuan per square meter.”
Some 226,000 square meters of new houses were released for sale locally last month, up 343 percent from November, according to Centaline data.
GUIZHOU and Shanxi are the top ranking provinces for mobile payments through Alipay, with 92 percent of the payments done via users’ smartphones, according to the latest figures from Alipay.
Residents in the two provinces generally adopt mobile payments faster than anywhere else in the country, with the nationwide mobile payment proportion at 82 percent, Alipay said yesterday.
There are a total of 11 provinces and autonomous regions where mobile payments contribute to over 90 percent of total spending through Alipay, include Xinjiang Autonomous Region, Hainan Province, Inner Mongolia Autonomous Region, Qinghai Province, and Tibet Autonomous Region.
Mobile payments made up 71 percent of the overall number of payments in 2016, and a growing number of consumers no longer find it necessary to bring along their wallets whenever they're dining or shopping.
Mobile payment is increasingly popular when paying for public transport, too.
Xi’an became the latest Chinese city whose subway system accepted Alipay from Monday, following Shanghai and Hangzhou Metros which have started to allow a simple smartphone swipe to enter and exit subway stations.
Overseas expansion also rose in the past year. Alipay is now connected with tens of thousands of merchants in 36 countries and overseas regions. The total number of payments in these regions rose three times from a year ago.
Apart from connecting with both online and offline micro and mini merchants, Alipay has also been pushing forward environmental protection strategies that are closely linked with its payment business.
Ant Forest, an environmental initiative to encourage Alipay users to keep track of their low-carbon activities, such as selling second-hand home electronics and using public transport, has been launched.
GIANT Interactive has invested nearly US$10 million in online house rental platform Mogoroom as part of the Shanghai-based game firm's latest move to expand its business portfolio, Shanghai Daily learned yesterday.
Founded in 2014, Mogoroom has raised a total of US$30 million in the latest round of financing including Giant’s investment of US$9.5 million. The platform offers 2 million rooms for rent in 16 cities including Shanghai, Beijing and Guangzhou.
Shenzhen-listed Giant, with its main business being online and mobile games, said it aims to expand business presence to various online services.
In November, Giant invested 520 million yuan (US$79 million) to become a major shareholder of a Shenzhen-based online finance firm. In July, it invested 300 million yuan for a minority stake in a fund that invests in companies covering Internet services.
CHINA will invest 732 billion yuan (US$113 billion) this year to expand its railway by 4,000 kilometers so that by 2025 the country will boast a 175,000-kilometer network.
China Railway, the nation’s state-owned railway company, said that 3,500 km of the new network are high-speed railway. The network will cover most of the cities by 2025, of which high-speed railway will total 38,000 kilometers, the national railway operator said yesterday.
Although the budget is below last year’s investment of 801 billion yuan, China is still expected to lead the world in developing a modern railway network by 2035, the operator said.
By the end of last year, China had 127,000 km of railway lines, including 25,000 km of high-speed rail — 66.3 percent of the world’s total by length.
The operator said that 60 percent of the railway will be double-track — which helps ensure safety and enhance efficiency by running one track in each direction instead of making trains in both directions share the same track — and 70 percent of the network will be electrified by 2020.
China now leads the world by proportion of electrified railway and is No. 2 by the number of double-track rails, according to peoplerail.com, the official railway news portal.
In 2017, a total of 3.04 billion passenger trips were made on railways, an increase of 9.6 percent year on year. More than 56 percent of those trips were made on high-speed railways.
CHINA’S manufacturing activity expanded in December at the quickest pace in four months to confirm steady economic growth in 2017, a private report showed yesterday.
The Caixin China General Manufacturing Purchase Managers’ Index increased to a four-month high of 51.5 for December from November’s 50.8, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media Co.
A reading above 50 indicates expansion, while a reading below reflects contraction.
An increase in production led to higher purchasing activity, with the rate of growth accelerating to a four-month high.
At the same time, capacity pressures continued to build, with backlogs rising as workforce numbers declined further, the report said.
Sub-indices showed that input prices eased to a four-month low, while growth in output prices slowed marginally.
“Manufacturing operating conditions improved in December, reinforcing the notion that economic growth has stabilized in 2017 and has even performed better than expected,” Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said.
However, Zhong warned that growth this year may face downward pressure due to the government’s tightening monetary policy and strengthening oversight on local government financing.
Released last week, the official PMI in December dipped to 51.6 from November’s 51.8.
The average reading for the past year was 51.6, the highest in seven years.
Divergence of the official data from Caixin data is common as the official manufacturing PMI survey covers 3,000 large and small companies while the Caixin PMI measures 500 small and medium sized businesses.
The Bank of Communications in a report said the December official PMI showed China’s domestic demand weakened but global economic recovery helped sustain exports.
BoCom economists said they expected China’s economic growth to ease this year as slower investment growth would offset continued recovery of exports and consumption.
China’s solar power generation has risen amid the government’s efforts to expand clean energy to curb pollution.Solar power generation totaled 106.9 billion kilowatt hours in the first 11 months of 2017, up 72 percent from a year earlier, according to data released by the National Energy Administration yesterday.This was equivalent to 33 million tonnes of standard coal, and helped cut carbon dioxide emissions by 93 million tonnes, the NEA said.By the end of November, China’s installed solar power generation capacity surged 67 percent annually to 125.79 gigawatts, and took up 7.5 percent of the total, up from 4.8 percent in 2016.China has been promoting green resources such as wind and solar in recent years to cope with pollution and to boost the quality of its growth.Pollution control will be kept as a priority, as the government has made it one of the “three tough battles” for the next three years, together with major risk prevention and poverty reduction.The country aims to cap its coal-fired power capacity at 1,000 gigawatts in 2020, and non-fossil fuel will account for half of the country’s total power generation by 2030.
CHINA shares ended the first trading of the new year higher yesterday following gains made by cyclical stocks.
The Shanghai Composite Index gained 1.24 percent, or 41.16 points to close at 3,348.33, hitting a new high in over a month.
The Shenzhen Component index rose 1.25 percent, or 137.6 points, to 1,1178.05, and the Nasdaq-style ChiNext added 0.97 percent to 1,769.67.
Cyclical shares like Shangfeng Cement, Huaxin Cement and Tongli Cement all rose by the maximum daily limit of 10 percent.
Dai Kang, chief strategy analyst at Guangfa Securities, said that he was bullish on cyclical stocks because these companies would benefit from the central government's supply-side reform.
The People’s Bank of China introduced a new policy tool last Friday to unfreeze more cash for commercial banks during the coming week-long Spring Festival in February.
Analysts said the measure will prepare the banks to deal with strong demand for cash during the holiday.
THE number of newly-listed companies on the Chinese mainland is expected to slow in 2018 from a historic high last year, PwC said.
The number of initial public offerings on the A-share, Shenzhen SME Board and ChiNext markets is slated to slow to 300 to 350, with capital raised expected at 180 to 200 billion yuan (US$28-US$31 billion) in 2018, according to PwC’s report released yesterday.
Frank Lyn, markets leader of PwC Mainland and Hong Kong, said that the number of IPOs in 2018 “is expected to decline following the recently formed IPO review committee, which adheres to stricter criteria and is tightening regulations governing IPOs.”
The tighter regulations and criteria for IPOs have already led to a drop in their approval rate, according to PwC.
“Due to recent regulatory measures, it is likely that more companies looking at an IPO will begin to reappraise if listing is really the best route forward for them or not,” said Jean Sun, assurance partner of PwC China.
In 2017, there was a historic high of 437 IPOs on the Shanghai and Shenzhen stock markets, up 93 percent from the 227 in 2016. The IPOs netted 235.1 billion yuan last year, up 56 percent from the 150.4 billion yuan in 2016.
CHINA will invest US$1 billion in the construction of three 60-story buildings at a mega-project near Sri Lanka’s main port, Colombo said yesterday.
The deal follows an earlier Chinese investment of US$1.4 billion to carry out reclamation work for the wider Colombo International Financial City development, strategically located next to Sri Lanka’s harbor, the only deep sea container port in the region.
The countries hope the project, initiated by former Sri Lankan president Mahinda Rajapakse, will create a financial center in the Indian Ocean comparable with those in Singapore and Europe, drawing billions in foreign investment and thousands of jobs.
Sri Lankan officials said 60 percent of the 269 hectare reclamation, due to finish next year complete with yacht marina, had already been completed.
No completion date was given for the buildings, the first for the development.
“China Harbour (company) will put in US$1 billion to build three buildings,” Sri Lanka’s Urban Development Minister Champika Ranawaka said in the capital.
“These three 60-storey buildings will be able to attract more foreign companies into Sri Lanka.”
The project was formally launched after a visit to Colombo by President Xi Jinping in 2014 but work was suspended by the new administration, which came to power in January the following year.
It resumed after the state-owned China Communications Construction Company entered into a fresh agreement with the new government in August 2016, despite geopolitical concerns from regional super power India.
Colombo is a key hub for Indian import-export cargo. Beijing has been accused of seeking to develop facilities around the Indian Ocean in a “string of pearls” strategy to counter the rise of its rival and secure its own economic interests.
After protests by New Delhi, Colombo removed freehold rights granted to the Chinese company and offered the land on a 99-year lease instead.