Last Week in Brief: Wrap of China's Financial News in the Week Ending Aug. 25
Liao Shumin
DATE:  Aug 26 2019
/ SOURCE:  yicai
Last Week in Brief: Wrap of China's Financial News in the Week Ending Aug. 25 Last Week in Brief: Wrap of China's Financial News in the Week Ending Aug. 25


Three major international indexes plan to increase their inclusion factor of China's domestically traded A-shares, which is expected to give a huge boost to Chinese mainland stock markets as the move will infuse over CNY250 billion (USD36 billion) of fresh funds into the market.

London's Financial Times Stock Exchange will increase its A-share weighting to 15 percent from 5 percent in its flagship index series and include 79 new stocks from the A-share market, effective before the opening on Sept. 23. This is expected to sluice USD4 billion in passive funds into the market. MSCI will lift its A-share factor from 10 percent to 15 percent after closing on Aug. 27, generating USD22 billion in capital inflows. The S&P Dow Jones Indices will include 1,241 A-shares at a time with a 25 percent inclusion factor before the opening on Sept. 23, which will add USD10 billion in value to the market.

More than 30 A-share listed property developers had released their semi-annual reports for this year as of Aug. 23. The overall advance receipts of A-share listed real estate firms increased annually in the first half, according to the released data. As the sector further concentrates, most big property developers' results are steadily growing, and their land purchases are becoming more cautious and redirected toward China's first- and second-tier cities.

As of Aug. 23, 18 listed brokers had published their semi-annual reports for this year, which finally showed signs of recovery. Only Chinalin Securities' results dropped in the first half, while other companies' performance soared in the period, with 10 having their growth more than double on an annualized basis.

China has released its draft of rules on mergers and acquisitions and reorganizations of companies listed on the STAR Market, the sci-tech innovation board of the Shanghai Stock Exchange, soliciting public opinions for these on Aug. 23.

A listee's assets from mergers and acquisitions, purchases or sales must generate operating income of more than half of the company's total and over CNY50 million (USD7 million) in the most recent fiscal year. The audit time for the company to issue shares to purchase assets is limited to 45 days. The issuance price may not be less than 80 percent of the market reference price, according to the draft.

More than 250 A-share company directors have left office since the beginning of this year. Their reasons are mainly career or personal concerns. More than half of the companies that underwent changes at the helm were state-backed, of which 40 chairman shifts took place. Such changes often came with the state firms' strategic and professional restructurings.

China's STAR Market has traded for a full month from its opening on July 22 to its closing on Aug. 22. The share prices of 28 listed companies all rose, with an average increase of 171 percent over the issue price and a median increase of 160 percent. The first month's turnover totaled CNY585 billion (USD81.9 billion), with an average daily deal amount of CNY25.4 billion, making up 13.8 percent of Shanghai Stock Market's total.

The turnover rate has now stabilized in the range of 10 percent to 15 percent since the market's first opening and 40 percent of registered investors participated in trading in the first month.

Of the world's top 500 companies, 490 have thus far invested in China, making 98 percent of the total, said Qian Keming, China's deputy minister of commerce, at the Aug. 21 press conference for the Qingdao Multinationals Summit that will convene in October in the eastern Chinese port city .

Editor: Ben Armour

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Keywords:   STAR Market,Real Estate Companies