The central government is giving serious consideration to a formal proposal submitted by Macau to establish a new kind of stock exchange in the Special Administrative Region. Traded in the offshore Renminbi, stocks listed on this exchange would be heavily weighted toward technology companies, much like the Nasdaq board in New York, and the recently established STAR Market in Shanghai.
It looks like this new market is part of a broader move within the region, if not the rest of country, to embrace diverse means of raising equity for Chinese companies. At the same time, Guangdong is looking into establishing a market like Shanghai’s STAR Market, in Guangzhou. And it has also applied formally to establish a Commodity Futures Exchange, like the Chicago equivalent, in Guangzhou’s Nansha district.
Could this be the start of a major push to get more Guangdong-based companies into the hands of equity investors? It certainly seems so, and there is huge upside room to move on this: just 1.8% of Guangdong’s 45,000 National-Level technology firms are publicly listed. Moreover, the person who revealed the details is just the kind of official to make this clear – and public.
Continue reading Macau pushes for Nasdaq-style offshore RMB market
Shenzhen’s government is boosting experimentation in its special zone of Qianhai, announcing another round of deregulatory measures focused on opening various sectors further to foreign investment. Many of the measures, 39 in total, relate to easing restrictions on human resources and encouraging cross-border capital flows.
Hong Kong, Macau and Taiwan-funded enterprises are still getting the biggest share of new support measures. However, all foreign enterprises are seeing an easing of restrictions on work permits for foreigners and an encouragement to engage in cross-border trade from a base in Qianhai. Meanwhile, tax services and patent rights are among the new measures designed to make international investors feel more secure setting up in the zone.
Banks in the zone will now be able to conduct cross-border RMB services and trade in RMB derivatives. This includes locally registered banks being able to issue RMB loans to overseas institutions and projects. Qualified residents, meanwhile, will be able to invest in securities listed overseas.
Read more in Chinese.
Guangzhou’s Nansha district will invest a total of RMB577 billion in 940 projects this year, including ports, railway network, express ways, municipal infrastructure, power network and public service facilities, up 14.8% YoY.
As of April, key construction projects have completed an investment of RMB24.93 billion, accounting for 26.2% of the annual total, an increase of 5.1% over the same period last year.
Nansha is to speed up the construction of Metro Lines 18 and 22, and facilitate the inclusion of the first phase of Metro Line 15, the South Section of Line 22, the South extension of Line 18, and the NS2 sightseeing Line into the new round of Guangzhou’s rail transit planning.
The Nansha section of the Shenzhen-Maoming Railway is also scheduled for construction this year. At the same time, Nansha will push forward the preliminary work of the Guangzhou-Zhongshan-Zhuhai-Macau high speed railway.
Read more (in Chinese).
Demand for medium- and long-term bank loans jumped in Guangdong during April, increasing at the fastest rate seen since 2011. This is according to data from the Guangzhou branch of the central bank.
“The amount of medium and long-term loans increased by RMB375.8 billion, up 20.4% YoY, the largest increase since 2011,” a spokesman for the People’s Bank of China in Guangzhou was quoted as saying by Nanfang Daily. “This indicated that the increase in infrastructure investment at the beginning of the year led to the stabilization of corporate financing needs. The support for the real economy from credit loans will be further strengthened,” he said.
The province’s financial statistics for April also showed that more credit has been allocated to the “key areas” as well as the “weak areas” of the economy.
Credit growth continued to grow rapidly in manufacturing (+40.6% YoY), infrastructure (10.3%), and scientific research and technology (35%).
Read more (in Chinese).