FiNETIK – Asia and Latin America – Market News Network

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China: Update on Shanghai FTZ Financial Reform

In year 2014 we expect to see numerous new policy and regulation updates on the financial reform of Shanghai FTZ. Where are we today?

Shanghai local government and Chinese central government will endeavor to expand the market functions, deepen the opening of local financial markets to foreign investors, increase the number of financial institutions in the FTZ, encourage the financial business innovation and make Shanghai more of an international financial center.

Many reform details are under consideration or have already been executed in 2014, such as setting up crude oil futures, international gold trading, financial asset trading, syndicated loan trading platforms and building nationwide trust registry service institutions. Besides, rules regarding foreign and FTZ-registered firms’ parent companies RMB bonds issuance are on the way. Moreover, Shanghai FTZ regulators will also consider introduction of free trade account management by allowing financial institutions to set up FTA (Free Trade Account) accounting units segregated for residents and non-residents. Furthermore, Shanghai FTZ regulators encourage direct investment abroad from local firms and private equity funds. The main contents of Shanghai FTZ’s reform could be described as a ‘1+4’ policy, where ‘1’ stands for risk control segregate account system; ‘4’ stands for interest rate liberalization, foreign exchange liberalization, RMB cross-border utilization and RMB capital account opening.

FX reform and FTA accounts

PBOC announced that, starting on March 17, 2014, the interbank RMB/USD spot price’s fluctuation spread increased from 1% to 2%. For commercial banks, the fluctuation range of RMB/USD spot price offering to the clients could be expanded from 2% to 3% from the mid-price calculated by Chinese interbank FX market. This is the third time for PBOC to expand the fluctuation range. Analysts say the expansion in RMB/USD spot fluctuation range is a clear signal that RMB will be internationalized in the near future and Shanghai FTZ is thought to be a test-bed for that. The most prominent aspect of Shanghai FTZ FX reform is the FTA (Free Trade Account). FTA is essentially a free trade bank account for Shanghai FTZ registered firms, very similar to an offshore bank account, which enables free capital flow inside the FTZ. FTA system allows both foreigners and local residents to get their money in and out through FTZ. Overall, there are mainly 3 types of FTA accounts. Local firms in the FTZ could open FTA accounts; individuals in the FTZ could open FTA accounts; foreign firms in the FTZ could open FTN accounts. As regulators are treading conservatively with hot money inflows and money laundering risks in mind, there is still no detailed timeline. However, we believe the FTA mechanism will be released in 2014 or 2015 as a momentous milestone in the financial history of China.

Interest rate reform

In March, 2014, a PBOC official claimed that the sequence of Shanghai FTZ interest rate reform will be ‘liberalize interest rates for foreign currencies prior to RMB interest rates; free the loan rates prior the deposit rates’.
There were actions towards interest rate reform in Shanghai FTZ from the regulators. PBOC announced that from March 1st, 2014, the deposit rate of foreign currencies below the amount of USD3 million would be liberalized, which actually removed the ceiling for foreign currencies’ deposit rate. This is thought to be an important step on the road to fully liberalized interest rate reform. The next step could be liberalization of the deposit rates of the local currency, which may not only be applicable in Shanghai FTZ, but also the rest of China.

Cross-border RMB utilization

On Feb 21, 2014, PBOC released the detailed regulation on expanding the usage of RMB overseas, which simplified the process of RMB overseas usage under current and direct investment account. However, overseas RMB financial scale and usage range will still be restricted, as well as cross-border e-commerce transactions and RMB trading services.
Six banks constitute the first batch of firms applied for the cross-border RMB settlement licenses. ICBC and Bank of China helped their clients within the zone to make an overseas RMB loan; Bank of Shanghai, HSBC and Citi Bank launched cross-border RMB current account centralized collection and payment services; Bank of Communications signed the first overseas RMB borrowing service for the non-bank financial institutions.

Capital account liberalization (to be announced)

In the future, the capital account might be opened for local and foreign investors. As Chinese reformers are relatively prudent and conservative, the liberalization process of capital accounts have been advancing relatively slowly so far. One important step in the process will be a gradual opening of commercial futures market to foreign institutional investors.

2014 version of ‘negative list’ (possibly to be released in the 1st half of 2014)

In the 1st half of 2014, a new version of ‘negative list’ will be released to update the 2013 version. Although it is not clear what items this version may include, there are two aspects which are certain. One aspect is that the contents included in the negative item list will be shortened, which implies that the restrictions on types of companies to register in the zone will be reduced. The other aspect is that Shanghai FTZ might cooperate with Hong Kong to introduce advanced practices from the city.

In-depth report on Shanghai FTZ are available here.

Source: Kapronasia, 05.06.2014

For more news and insights into Chinas Financial markets please visit www.kapronasia.com

Filed under: China, News, Risk Management, , , , , ,

China: Shanghai launches new OTC market

An over-the counter (OTC) equity bourse was inaugurated in Shanghai Monday,  marking the first step in the city’s effort to forge the nation’s largest OTC market, Shanghai Securities News reported.

The equity exchange, which will mainly serve non-listed companies in the Yangtze River Delta, has a total registered capital of 80 million yuan ($11.8 million). Shanghai United Assets and Equity Exchange, a comprehensive platform for assets and equity transactions, has pledged 50 percent of the investment, financial conglomerate Shanghai International Group 30 percent, and Shanghai Zhangjiang Hi-Tech Park Development Co 20 percent, the report said.

The new bourse is set to be registered in the Zhangjiang Hi-Tech Park, the paper said.

The Binhai New Area of north China’s Tianjin has set up the country’s first OTC market. Other Chinese cities, including Beijing, Chongqing, Shenzhen and Wuhan have all vowed to launch OTC markets in the future.

Source: CITIC NEWEDGE, 26.07.2010 Mr Liang Haisan

Filed under: China, Exchanges, News, , , ,

Fears of China property bubble

A large bubble is forming in China’s property market as a result of Beijing’s credit-driven stimulus programme, one of the country’s most prominent real estate developers warned.

Zhang Xin, chief executive of Soho China, one of the country’s most successful privately owned property developers, told the Financial Times the asset bubble was leading to rampant wasteful investment in the sector, undermining the country’s long-term growth prospects.

“Real estate prices should only go up because people want to actually use the space, but at the moment we can see more and more empty buildings across the whole country and in every real estate segment,” Ms Zhang said. “The rising prices are a direct result of so much money coming from the banks and the Chinese banks should be very worried.”

Ms Zhang’s assessment was echoed by Fan Gang, a member of the central bank’s monetary policy committee, who warned on Wednesday that real estate in cities such as Beijing, Shanghai and Shenzhen was expensive and there was a growing risk of asset price bubbles.

Urban property prices in 70 big and medium-sized Chinese cities rose 3.9 per cent in October from a year earlier, accelerating from September’s 2.8 per cent rise, according to government figures.

Price rises in top-tier markets such as Beijing and Shanghai have been much faster. Analysts say the rebound has largely been driven by an unprecedented government-led expansion of bank lending. It is also being driven by government policies, including tax breaks, low interest rates and smaller down-payment requirements.

Investment in real estate development, a key driver of economic growth, rose 18.9 per cent in the first 10 months of the year on a year earlier, a marked acceleration from 17.7 per cent growth in January-September.

Ms Zhang said the current speculation should be a serious warning for the industry and the general economy.

“In Manhattan, they have vacancy rates of 10-15 per cent and they feel like the sky is falling, but in Pudong [the central business district in Shanghai] vacancy rates are as high as 50 per cent and they are still building new skyscrapers,” she said.

“If you look at GDP growth, then China looks like a new engine driving the global economy, but if you look at how growth is being created here by so much wasteful investment you wouldn’t be so optimistic.”

Source: FT, 18.11.2009 Jamil Anderlini in Beijing

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Global warming threat for Asia financial hubs – Yangtze ‘facing climate threat’

The report, produced by WWF, the environmental pressure group, puts the two financial hubs in the top 10 cities threatened by climate change in Asia, the region widely believed to be most vulnerable to rising global temperatures.

It warns that Hong Kong is in danger from higher sea levels, which are likely to rise 40cm-60cm in China’s Pearl River delta by 2050, increasing the area of coastline that is vulnerable to flooding by up to six times.

Costs imposed by typhoons are also likely to rise dramatically, the report says, noting that 14 of the 21 extreme storm surges between 1950 and 2004 occurred after 1986.

The number of nights when Hong Kong temperatures rise above 28°C has risen almost fourfold since the 1960s, while the number of winter nights when the temperature falls below 12°C is predicted to fall from an average of 21 to zero within 50 years.

For Singapore, the report says, the sea level is forecast to rise by 60cm by the end of the century, eroding coastal protection and decreasing the shoreline of the city state, making it more vulnerable to storm surges and flooding.

The report says climate change could also increase the prevalence of dengue fever. The number of cases has been rising in periodic outbreaks and the last significant peak, in 2007, saw the third highest number of outbreaks ever.

Dhaka, the Bangladeshi capital, heads the list of the most vulnerable cities, mainly because of its position in a big river delta already subject to periodic flooding, its low average height above sea level and its poverty, which makes protection and adaptation more difficult.

Other cities at risk include Jakarta and Manila, which rank equal second, Calcutta and Phnom Penh, which are equal third, Ho Chi Minh and Shanghai, equal fourth, Bangkok, fifth, and Kuala Lumpur, which ties with Hong Kong and Singapore for sixth place.

The report calls on developed countries to agree to shoulder the bulk of the costs required to reduce greenhouse gas emissions, to finance an adaptation fund to pay for changes required in developing countries, and to provide recompense for losses and damage caused by climate-related catastrophes.

However, the report also says that vulnerable cities and national governments should take action themselves, including better management of coastal habitats and ecosystems.

The report is timed to influence the 21 heads of government attending this week’s Asia Pacific Economic Co-operation summit in Singapore, before the global climate change summit in Copenhagen next month.

Source: FT, 11.11 2009 by Kevin Brown in Singapore

The Yangtze river basin is being increasingly affected by extreme weather and its ecosystems are under threat, environmentalists say.

In a new report, WWF-China says the temperature in the basin area of China’s longest river has risen steadily over the past two decades.

This has led to an increase in flooding, heat waves and drought.

Further temperature rises will have a disastrous effect on biodiversity in and along the river, the report says.

The WWF – formerly known as the World Wildlife Fund – predicts that in the next 50 years temperatures will go up by between 1.5C and 2C.

The group’s report is the largest assessment yet of the impact of global warming on the Yangtze River Basin, where about 400 million people live.

Data was collected from 147 monitoring stations. The report’s lead researcher, Xu Ming, said the forthcoming Copenhagen negotiations on climate change would have an obvious and direct influence on the Yangtze.

“Controlling the future emissions of greenhouse gases will benefit the Yangtze river basin, at the very least from the perspective of drought and water resources,” he said.

The report says the predicted weather events and temperature rises will lead to declines in crop production, and rising sea levels will make coastal cities such as Shanghai vulnerable.

Some of the problems could be averted by strengthening river reinforcements, and switching to hardier crops, its authors suggest.

Source: BBC, 10.11.2009

Filed under: Asia, China, Energy & Environment, Hong Kong, India, Indonesia, Japan, Malaysia, News, Risk Management, Singapore, Thailand, Vietnam, , , , , , , , , , , , , , , , , , , , , , , , , ,

Shanghai Stock Exchange Vice President Liu Xiaodong: ETFs Enjoys A Big Boom

“The development of ETF has been beyond our imagination and it is now making good time.” Vice President Liu Xiaodong of the Shanghai Stock Exchange (SSE) said at the ICBC Credit Suisse SSE Central State-owned Enterprises ETF release conference yesterday that the SSE would drive the development of ETF further to enrich the variety of the ETF products and gradually build it into one of the major SSE products.

According to Liu, ETF is a kind of open-ended index fund listed and traded in the exchange, which tracks a basket of stocks with the characteristics of low cost, diversified investment, high transparency and high fluidity. Since the birth of the first ETF in 1993, ETF products have flourished rapidly worldwide. As of the end of April 2009, over 3,000 ETF products had been listed on 42 exchanges worldwide, with the asset scale up to US$706.9 billion in total. An increasing number of companies have engaged in the development of ETF products, with the amount of existing ETF administrators more than 90 and a number of fund management companies specializing in ETF products. Meanwhile, the variety of ETF products have been diversified from the single stock ETF to bond ETF and commodity ETF, from the ETF in single market to the ETF across markets and from the passively managed ETF to the actively managed ETF. It is noticeable that ETF products have become one of the most successful products worldwide at the moment as they realized large sums of net capital inflow even under the international financial crisis in 2008 when the global asset depreciated seriously.

Liu pointed out that the ETF market in China is still growing, and the SSE has always attached importance to the promotion of product innovation. The introduction of ETF products was the important measure taken by the SSE in recent years to develop the fund industry, perfect the product variety and drive the innovation. On the one hand, ETF products enrich the investment variety and provide investors with a cost-efficient asset allocation tool which tracks index income. On the other hand, ETF product, like the index, is unlikely to be manipulated. With high fluidity, it is one of the major targets of derivatives as well as the cornerstone of product innovation. Through the efforts of all market participants, the SSE introduced the first ETF product to the domestic market in early 2005 and won several international awards. After 4-year development, there are 5 ETF products in the domestic market, with the asset scale of over RMB30 billion and the daily trading volume of approximately RMB2 billion. In terms of the asset scale, the domestic ETF market is the 3rd largest ETF market in Asia following Japan and Hong Kong. With regard to the trading scale, the domestic ETF market is ranked first in Asia and placed among the top 10 globally. As a whole, the development of ETF in the past was successful. The SSE Central State-owned Enterprises ETF introduced by ICBC Credit Suisse Asset Management Co., Ltd. this time is the first ETF product introduced by the domestic market in the last two years. SSE Central State-owned Enterprises Index comprises 50 listed companies with large scale and high liquidity controlled by central state-owned enterprises. These companies are also leading enterprises in 10 to-be-revitalized industries that the RMB4000 billion national investment is planned for. The timely introduction of SSE Central State-owned Enterprises ETF provides investors with an opportunity to share the income of the high quality large-cap stocks in a more easy and transparent way.

Liu also stated that with the diversification of the index, the establishment of the supporting mechanisms including the margin trading and securities lending and the stock index futures fuelled the development of ETF. In the days to come, the SSE will vigorously support the development of ETF and facilitate its expansion in terms of industry and type so as to meet the need of investors. There will be a lot of ETF products awaiting the approval for listing in the future. The SSE will actively impel the development of ETF in China and build it into a major SSE product. Liu added that there are still large space for the promotion and marketing of ETF. He appealed to the dealers to support the sale of relevant ETF index funds and work together to drive the development of ETF in China.

Source: MondoVisione, 20.07.2009

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Seeking Green Alpha- Investor enthusiasm for clean-tech plays in China remains strong, despite signs of faltering local government support for green projects.

Investor enthusiasm for clean-tech plays in China remains strong, despite signs of faltering local government support for green projects.

Almost every investor conference or salon we attend these days has a separate panel discussion on clean tech – and the recent China CEO Investment Summit in Shanghai was no exception. During a packed session, a panel of lawyers, representatives from various stock exchanges and venture capitalists impressed the audience with the enormous and diversified opportunities offered by China’s green investment sector.

One of the main areas of opportunity highlighted by the panel was water. China has historically struggled to supply many of its regions with sufficient water supplies and the rapid industrialization and urbanization over the past few decades has exacerbated this problem. According to a survey by the State Environmental Protection Administration (SEPA) published in July 2008, 35% of China’s urban water supply did not meet safe drinking-water standards, up from 20% in 2006.

This dire situation has, however, created an investment opportunity. Speaking during the session, Huang Gefei, head of China Galaxy Investment Management, said his company had been investing in wastewater treatment companies for some time. Unlike other clean-tech sectors, such as solar and wind, wastewater treatment remains relatively untapped by investors, despite enormous demand. China’s total wastewater capacity in 2008 met less than 60% of demand, below the 70% base-line set by the State Council’s Comprehensive Working Program on Energy Saving and Emission Elimination issued in 2007. The central government included plans to increase spending on expanding wastewater treatment capacity in its RMB 4 trillion stimulus package.

FiNETIK recommends:   The State of the Environment of China in 2008, Ministry of Environment, 24.06.2009

Another clean-tech investment area that interested the panelists was coalbed methane (CBM) exploitation. CBM, which is stored in coal and is generally not extracted by most coal mines, is an ideal substitute for natural gas and could help to ease gas shortages in China. In addition, panelists said that it had the potential to make coal mining safer and mitigate the risks of mine explosions – mine safety is a serious issue in China, with official statistics reporting 413,700 mining accidents and around 90,000 deaths last year. The government plans to bolster the CBM industry and increase CBM consumption to 10% of total gas use until 2010. Several supportive policies have been announced, including full VAT refunds, and the shelving of import duties on CBM equipment. Another factor that makes CBM exploitation attractive for investors is the relatively high profit-margin. CBM producers are allowed to sell gas at market prices that are not subject to the price ceiling set for natural gas. Although the sector is still in its infancy in China, it has seen several deals, including Baring Asia and Chengwei Venture’s $88 million joint investments in China Coalbed Methane Holdings Limited and IFC’s $15 million investment in Far East Energy (OTC:FEEC). Other investment opportunities highlighted during the session included energy storage, hybrid vehicles and thin-film solar technology.

The panelists stressed, however, that the continued growth of the clean-tech space in China was heavily reliant on government support. With the economic downturn continuing to bite, there is evidence that some Chinese local governments are letting environmental protection standards and clean-tech investments slide in their determination to maintain GDP growth in line with the nationwide 8% FY 09 growth target. This could create problems for clean-tech companies, especially in areas where heavily polluting industries such as paper and steel are key GDP drivers. Panelists mentioned that some desulphurization and wastewater treatment companies in particular were having difficulties as a result. This was a timely reminder that while clean-tech investments in China have enormous potential, they also carry significant potential risks.

Such a situation should not be a surprise in a country which has traditionally chased rapid GDP growth at the expense of environmental protection. But this same reason has convinced us of the central government’s new-found resolve to address environmental problems, as it now appears to recognize the fact that environmental degradation has eaten into China’s GDP growth. While conditions for clean-tech industry growth may vary from locale to locale, overall conditions appear promising – and judging by the number of people attending the recent session at the China CEO Investment Summit, this has not gone unnoticed by investors. The light at the end of the tunnel could be green.

Source: http://www.jlmpacificepoch.com, 10.07.2009 by Ivy Cheng

Filed under: Asia, China, Energy & Environment, News, , , , , , , , ,

Shanghai Stock Exchange President Zhang Yujun: Internationalized SSE To Serve Construction Of Shanghai Int’l Financial Center

The “Opinions of Promoting Shanghai’s Development of Modern Service and Advanced Manufacturing Industries and Establishing International Financial and Shipping Centers” (hereinafter referred to as the “Opinions of Constructing Two Centers”), approved by the State Council on March 25, 2009, put forward the plan of building Shanghai into an international financial center to match China’s economic strength and RMB’s international status by 2020.

The systematic plan and all-round deployment of the central government for the construction of Shanghai International financial center marks the kick-off of the substantial work. Click here or full details.

Source: SSE 19.05.2009

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China:Shanghai Stock Exchange takes new measure to build Shanghai into an International Financial Center

Relevant listed companies are required to follow the English version of “Rules Governing the Listing of Stocks on Shanghai Stock Exchange (Revised in 2008)” (the Rules), released by the Shanghai Stock Exchange (SSE). This is another initiative by the SSE to bolster the building of Shanghai into an international financial center.

According to an SSE notice on the issue, the initiative aims to urge the listed companies’ foreign directors and senior management as well as their overseas shareholders to strictly observe the Rules. In case of any discrepancy between the English and the Chinese versions, the Chinese one shall prevail.

An SSE official said that the new initiative, a material measure for propping up the construction of Shanghai into an international financial center, also aims to provide a better service for companies listed simultaneously on several markets in addition to the Shanghai market as well as the overseas investors by facilitating their understanding of relevant regulatory rules of the SSE.

Source: SSE Shanghai Stock Exchange, 10.04.2009

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Shanghai Stock Exchange Governor Geng: Market Stability, the Primary Mission in 2009

The Shanghai Stock Exchange (SSE) has recently held its annual event of 2009 Press Publicity Symposium in the sixth consecutive year. SSE Governor Geng Liang and President Zhang Yujun attended the meeting and introduced the SSE’s major work in 2009. Fifteen leading media, including the Shanghai Securities News, took part in the symposium and joined in the positive and in-depth discussion on the stability and development of the SSE market. Geng stressed at the meeting that the primary mission of the SSE this year is to maintain stability in market development.

Geng said that the SSE has been keeping a good working relationship with the press media, and it thanks the media for their contribution to the development of China’s securities market. According to Geng, China’s economy and capital market will face both opportunities and challenges in 2009. We should strengthen our confidence in the face of challenges, maintain stability to overcome difficulties, and strive to do a better job by making greater efforts in the building of Shanghai into an international financial center as well as the development of national economy and China’s capital market.

Geng concluded that confidence comes from the following aspects. First, our national economy as a whole still keeps a good momentum. Second, the basis of China’s capital market is healthy, benefiting from a series of reforms on the securities market started a few years ago, including the equity division reform and the unremitting efforts in comprehensive governance of securities companies and improvement of the level of corporate governance of listed companies. Third, the confidence comes from the macroeconomic policies from the government on bolstering growth and expanding domestic demand as well as the continuous efforts by regulatory bodies on supporting the development of the securities market. Fourth, from the increasing trading volume, the investors’ confidence on China’s capital market is on rise.

Geng also emphasized that the primary task this year for the SSE is to maintain stable development of the market.

First, we should ensure trading security and smooth operation of the market.

Second, we must unswervingly push forward the construction of blue chip market. This year, the SSE will actively take measures to support the merger and reorganization of listed companies for improvement and optimization.

Third, the SSE should overcome the difficulties to further perfect the market trading mechanism with the focus on the block trading market by introducing an information platform for it.

Fourth, in terms of product innovation, the SSE will further the development of ETF, develop and introduce the SHSE-SZSE300 Index ETF in due time.

Fifth, more efforts should be made to enhance the construction of the bond market by taking advantage of the return of listed commercial banks to the exchange’s bond market.

Source: SSE Shanghai Stock Exchange, 09.04.2009

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FISD Asia Pacific Event – Shanghai 21.04.2009

    The FISD Asia-Pac events offer the opportunity for professionals in the local market data community to meet and discuss the impact of both local and global industry developments. These meetings are scheduled to provide FISD members from around the globe with an opportunity to coordinate their business travel around activities in which the local Pacific Rim market data community participates.

    Fullday Program

    Welcome Remark – Mr. Bai Shuo, Assistant to President and CTO, Shanghai Stock Exchange
    Keynote – Mr. Wang, Yong, CEO, SSE InfoNet Ltd.
    Data Acquisition and Application for High Frequency Trading – Mr. Alex Chu, Bloomberg
    Speech by A Domestic Institutional Investor
    Presentation by China Securities Index Co., Ltd.
    FAST protocol applied in SSE Level-2 market data feed – Mr. Huang, Yue, SSE InfoNet Ltd.
    FISD Initiatives and Activities – Tom Davin, Managing Director, FISD/SIIA
    Economic Crisis: Regional and Global Update – Andrew Browne, Editor – China, WSJ and DJ Newswires

    Inside Market Data Panel: “Drivers of Data Demand in the Dragon Empire“                                               Eastern Promise: Competitive Battlefield or Regulatory Minefield?“

    Briefing from Standard & Poors – Kevin Ng, Director, Fixed Income & Risk Management Solutions, Asia Pacific
    Hardware – the path to lower latency” – Crispin Clarke, SVP – Asia and Latin America, Solace Systems

    Source: FISD, 16.03.2009

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    SSE Shanghai Stock Exchange To Build A Block Trading Information System

     In an interview regarding the market’s hot issues on March 7, the National Committee Member of the Chinese People’s Political Consultative Conference and also Governor of the Shanghai Stock Exchange (SSE) Geng Liang said the SSE is confident and determined to promote the construction of the capital market in a standard and stable manner.

    This year, the SSE will further develop the blue-chip market, work on the establishment of the block trading information platform, propel the growth of the exchange’s bond market as well as conduct R & D and product innovation of ETF at a deeper level and in a broader scope.

    Develop Blue-chip Market, Promote Merger, Acquisition & Reorganization According to Geng, only 8 companies’ market capitalization on the SSE had exceeded RMB10 billion at the beginning of its establishment, and now the number is 131, among which 1 company’s market capitalization has exceeded RMB1 trillion, 15 companies have their market capitalization between RMB100 billion and RMB1 trillion, while 115 companies between RMB10 billion and RMB100 billion.

    In 2007, the SSE ranked No.6 in market capitalization, No.7 in trading volume and No.2 in raised capital amount among the world’s major exchanges, and in 2008, its rankings were No.6, No.7 and No.8 in the aforesaid indicators. The RMB223.8 billion raised capital, which saw a drop last year, still made the second best record since its establishment.

    Geng said that the framework of the SSE’s blue-chip market has been confirmed, and it will stick to the goal of developing blue-chip market this year, with the following tasks to be done: Firstly, to ensure trading safety and provide an effective, open and fair trading platform; secondly, to further develop the SSE’s blue-chip market, with emphasis on promoting the to-be-listed companies’ growth by merger and reorganization. According to Geng, the SSE has organized 9 teams to visit 53 listed companies in 18 provinces which have reorganization and merger intentions to conduct research and provide services since the fourth quarter of last year.

    Moreover, the SSE has specially established the Issuance and Listing Department and the Beijing Center for enhancing the merger and reorganization of to-be-listed companies. Geng said that, if necessary, the SSE will engage professional institutions to assist the listed companies with reorganization and merger intentions in researching and formulating plans.

    To Establish a Block Trading Information Platform According to Geng, the block trading market, though established for over 5 years, has been brought into full play in 2008 thanks to the policy of encouraging the shareholding lessening of big/small non-tradable stocks on the block trading market issued by the China Securities Regulatory Commission (CSRC) and the investors’ growing recognition of the advantages of the block trading after several years’ practice.

    Geng said that the block trading volume in 2008 has seen a year-on-year increase of tenfold while the transaction number has seen a year-on-year increase of twelvefold. Geng described the launch of the block trading as an important reform of the SSE’s trading methods, which still has great potential for development.

    The difficulty facing block trading is to find “counterpart”, so the SSE is preparing to establish a block trading information platform to provide information for trading counterparts, and to further develop special floor business of the block trading. To Launch SHSE-SZSE300 ETF Products Geng stressed that stability will be maintained in pushing product innovation under the global financial crisis, and “product innovation and development will be in light of the market acceptance level”. The products to be introduced by the SSE this year will be featured by “simple transaction, low cost and comprehensibility”.

    Geng said that the SSE will conduct research and product innovation in the depth and width of ETF products this year. Currently, it is working on the launch of SHSE-SZSE300 ETF products to pave the way for hedging and arbitrage trading by investors after the launch of stock index futures. Besides, it also plans to develop such products as sector ETF and bond ETF.

     To Modify Trading Rules of Bond Market Geng said that the development of the SSE’s bond market is relatively slow, with the amount of bonds under custody on the exchange’s bond market over RMB300 billion and the daily average trading volume at RMB12.1 billion, among which the spot trading volume is RMB2 billion and the repo trading volume RMB10 billion. In January 2009, the CSRC and the China Banking Regulatory Commission jointly published relevant notice of listed commercial banks’ return to the bond market of exchanges. “We fully support and welcome listed commercial banks to trade on the exchange’s bond market,” said Geng, “it was one of our priorities to develop the bond market this year.” Geng introduced the efforts made by the SSE regarding the aforesaid issue: firstly, to provide on-site services for 14 listed commercial banks one by one, assisting them to better understand the trading rules of the exchange’s bond market; secondly, to modify the existing bond trading rules so that they are simpler and more adaptable to the trading practices of commercial banks; thirdly, to fully check the fixed income platform, ensuring the trading safety after commercial banks’ return to the exchange’s bond market.

    Meanwhile, the SSE is actively promoting the back-end construction to gradually create the unified and interconnected information of related markets. Regarding the integration of the depository and clearing back-end of the exchange’s bond market and that of the inter-banking bond market, Geng expected the back-end of China Securities Depository and Clearing Corporation Limited and that of China Government Securities Depository Trust & Clearing Co., Ltd. should be gradually integrated, the trusteeship transfer be accelerated and T+0 or T+1 be realized. “The task has been under way for years, and my proposal this year is to gradually formulate a unified and interconnected bond market by further accelerating the bond market’s development and strengthening the connection between the two platforms”, said Geng.

    Confidence in a Sound and Stable Capital Market Geng said the SSE is confident and determined to promote the construction of the capital market in a standard and stable manner despite of the changing economic situations both at home and abroad. The reasons are as follows: Firstly, the fundamentals and long-term positive trend of China’s economy remain the same, which is the basis and confidence source of the stable development of the capital market. Secondly, China’s capital market is generally in sound condition, which has a more solid basis after the equity division reform, the clearing and rectification of securities companies, the debt clearing of listed companies’ major shareholders and other important reforms in recent years.

    The equity division reform solved the bottleneck problems affecting the sound and stable development of the capital market; the clearing and rectification of securities companies, with 33 unqualified securities dealers banned from the market, removed the industry risks; the debt clearing of listed companies’ major shareholders led to a total of RMB49.5 billion capital returned by SSE-listed companies, who have become more capable of overcoming difficulties.

    Thirdly, the CPC Central Committee and the State Council have formulated the general guideline of maintaining growth, expanding domestic demand and adjusting structure to promote the steady economic growth since last year. Concerning the specific issues in the capital market, the CSRC has also introduced a series of measures such as encouraging the shareholding lessening of big/small non-tradable stocks through the block trading platform, the repo of listed companies and the shareholding increase of listed companies’ major shareholders. All these policies and measures have been brought into full play.

    Fourthly, investors still have great passion in the capital market. According to Geng, the daily trading volume of the SSE of last year reached RMB73.3 billion in spite of the great adjustments in the two exchanges in Shanghai and Shenzhen. By March 3, 2009, the SSE had seen a daily trading volume of RMB101.9 billion, up 39% than that of last year.

    Source: MondoVisione 10.03.2009

    Filed under: China, Exchanges, News, Trading Technology, , , , , , , , , , ,

    FTSE Data to be distributed by Shanghai Wind Info in China

    FTSE Group (FTSE), the global index provider, and Shanghai Wind Info, the leading data and financial software vendor in mainland China today announce that FTSE’s end of day index data will be made available to QDII institutions and securities firms via Wind Financial Terminals. The collaboration with Shanghai Wind Info demonstrates FTSE’s commitment to providing the Chinese market with index tools that aid its international investment decisions and global market access.

    FTSE’s end of day data will give QDII institutions and other investors access to information such as constituents, market capitalization, dividend yield as well as price and total return index values in different currencies. This information will be provided for a range of global indices covering country, sector, investment strategy and alternative asset classes, and can be used for analysis, measurement or management of index linked funds including Exchange Traded Funds (ETFs). The data is a valuable resource for investors to manage their global investment portfolios.

    Donald Keith, Deputy Chief Executive of FTSE Group said, “FTSE continues to work closely with the QDII community in China to provide data, which is used as the basis for research and development of global equities products. Cooperating with the one of the largest financial information provider in China extends FTSE’s visibility in the China market.”

    Andrew Sun, Vice President of Shanghai Wind Info said, “Shanghai Wind Info is delighted to work with FTSE Group, the world’s leading index provider, along with the continuous internationalisation of the China market, I believe that the service we launched together can enhance the Wind Financial Terminal’s value and to the clients.”

    Source: FTSE, 19.02.2009

    Filed under: China, Data Management, Data Vendor, News, Reference Data, , , , , , , , , ,

    Deutsche Börse Opens Representative Office in Beijing

    Following the opening of an office in Singapore last month, Deutsche Börse has added another Asia Pacific location to its on the ground presence with the opening of a new office in Beijing. The exchange operator indicates that this is part of its plan to expand its relationships within the Chinese market and it has appointed Jianhong Wu to head the office.

    The exchange received approval by the China Securities Regulatory Commission (CSRC) to establish a representative office in Beijing on 26 September and has been working on finding an appropriate office head since that date. Accordingly, it selected Wu to become the chief representative officer for the Chinese market.

    Deutsche Börse deputy CEO Andreas Preuss explains that the exchange is keen to become a partner within the Chinese market via the strengthening of its relationship with Chinese regulators and capital market institutions. With a view to this, the exchange operator has been developing relationships with domestic exchanges including the Shanghai Stock Exchange in 2004 and the Shenzhen Stock Exchange this year.

    Among other activities, Deutsche Börse has also been organising road shows and IPO conferences with the aim of promoting stock exchange listings for domestic Chinese companies. Currently, 13 Chinese companies have opted for a primary listing at the Frankfurt Stock Exchange.

    Source: A-Team Asian Markets 13.12.2008

    Filed under: China, Exchanges, News, , , , , , , , , , , ,

    Xinhua News Agency and Shanghai Stock Exchange team on financial information

    The Xinhua News Agency (XNA) and the Shanghai Stock Exchange (SSE) further expanded their cooperation as the XNA Financial Information Platform established on the SSE its first Financial Information Collection Station ever on the domestic capital market on November 4.

    Before, the Platform had already entered Wall Street, with an information collection station on the New York Stock Exchange (NYSE). XNA Vice President Lu Wei, SSE Governor Geng Liang inaugurated the Station.

    It is learned that full-time journalists will be dispatched to the SSE upon the establishment of the Station for collecting and publishing promptly the first-hand financial information on the Shanghai securities market. According to the “XNA, SSE Framework Agreement on All-round Cooperation” signed by the XNA and the SSE this May in Beijing, the two parties will cooperate widely and closely in such fields as financial information services to build a news collection and publication mechanism for deep cooperation in fields of commercial data and information products. Through the channels and platforms including the “Xinhua 08”, a comprehensive financial information service system independently developed by the XNA, efforts will be made to popularize the key information and data on the Shanghai securities market to cultivate the market, educate investors and make deep information research. Besides, they will also work together in information technology and talent exchange.

    As a national project in accordance with the “Outline of Cultural Development for the ‘Eleventh Five-Year Plan'”, the XNA Financial Information Platform is a comprehensive financial information service system, serving as a terminal for providing real-time information, market quotations, historical data, research tools and analysis models for economic management departments, financial institutions and large/medium enterprises in their transactions of bonds, foreign exchanges, stocks, gold, futures and property rights both at home and abroad.

    On October 20, the Shanghai Headquarters of XNA Financial Information Platform was inaugurated in the Lujiazui Finance & Trade Zone in Pudong District to boost the construction of Shanghai’s international financial center and upgrade the efficiency of financial information collection. It is a vital move for the Headquarters to set up the Station on the SSE. Following its successful move into the Wall Street with a station on the NYSE for timely collection of daily financial information, the XNA is also planning to establish more stations on other key elements markets both at home and abroad.

    Source: Xinhua News Agency, 06.11.2008

    Filed under: China, Data Vendor, Exchanges, Hong Kong, News, , , , , , , , , , , , , ,

    Cameron Systems – 1st FIX Platform Vendor in Shanghai

    Another first sees leading CameronFIX Engine available for all FIX trading in China – building on European & US experience.

    London & New York: Tuesday March 29, 2005 — The only globally proven Financial Information Exchange protocol [FIX] platform provider Cameron Systems today announced the opening of an office in Shanghai, China in response to the growing adoption of the FIX protocol within the region and the resulting increased demand for the leading CameronFIX Universal Server FIX Engine.

    Whilst the Chinese securities market was established only 15 years ago with the opening of the Shanghai Stock Exchange in 1990 and the Shenzhen Stock Exchange one year later, China has rapidly emerged as potentially one of the largest equities and commodities markets within the international trading community and likely to eclipse the current uptake rate of the FIX protocol in Europe.

    Senior representatives from Cameron Systems have spent considerable time in China during the past few years establishing the foundations for Cameron’s presence in the region with strong interest in FIX from market leaders preparing for international opportunities and competition. With the Shanghai office scheduled to open Q2 2005, Cameron Systems has recruited senior staff to provide locally skilled CameronFIX development and support for the Greater China financial community, primarily Shanghai, Hong Kong and Beijing.

    In Shanghai last week, Cameron Systems’ CEO Peter Cooper said: “We are delighted to make this announcement. Cameron Systems is committed to expanding its presence in the Chinese financial markets to deliver the benefits of the Financial Information Exchange (FIX) open standard. FIX is being rapidly adopted in China and as the FIX leaders we are seeing most of the demand – and we are meeting that demand – with the No.1 FIX engine CameronFIX. Our decision to open a dedicated local office was predicated on providing excellent service for the Chinese customer base just as we do for the rest of the world today. Like all our offices, Cameron Systems Shanghai will be staffed with world class developers that contribute to our product development and serve clients in all regions.”

    Chris Biscoe, Co-Chair of the FIX Protocol Organization’s Asia Pacific Regional Committee, congratulates Cameron Systems for being the first FIX engine provider to establish a center in mainland China. “Today’s announcement highlights the important role Cameron Systems is playing with the expansion of the FIX protocol in China. FPL recognizes and thanks Cameron Systems for its ongoing commitment to actively promoting the FIX protocol globally.”

    “Our aim is to be the leading FIX solutions provider for the local banking and financial sector in China,” said Founder and Chief Technology Officer for Cameron Systems, John Cameron. “We are excited about the potential of FIX in China and feel honored to be able to play a small part in the astonishing economic miracle that is China today.”

    Today’s announcement follows Cameron’s recent successful FIX Direct Market Access implementations with major Exchanges including Singapore Exchange, Deutsche Bourse, Tokyo Stock Exchange, Australian Stock Exchange and Osaka Securities Exchange with more underway.

    Cameron Systems is the only globally proven Financial Information Exchange protocol [FIX] trading solutions provider for worldwide Brokers, Fund Managers, Exchanges, Transaction Networks and Software Vendors across the banking and financial industry. Celebrating 8 years of success in 2005 with more connections, more customers and more products, Cameron Systems continues to help grow financial markets worldwide by actively supporting and playing a leading role in the expansion of the FIX protocol. Cameron Systems has been a Premier Member of FPL the global industry body for FIX since 2003.

    Filed under: Australia, China, Exchanges, FIX Connectivity, News, Trading Technology, , , , , ,