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More Risks For China Property Market?

More Risks For China Property Market?

June 15, 2010 (Chinavestor) After spending much of this year under considerable pressure, the Claymore/AlphaShares China Real Estate ETF (NYSE: TAO) could be in for some selling as China's bank regulator is forecasting more risks on the horizon for a real estate market Beijing has worked diligently to cool.

The China Banking Regulatory Commission is asking banks to report on risk exposure before the end of this month after saying mortgage risks are rising. Property-price gains spurred concerns that a record 9.59 trillion yuan ($1.4 trillion) of loans extended last year to combat the effects of the global financial crisis may be causing asset bubbles, according to Bloomberg News.

China's property prices surged by more than 12% in May, showing the government's efforts to rein in real estate prices and a prevent an asset bubble from forming may not be working. The Claymore/AlphaShares China Real Estate ETF (NYSE: TAO) has gained almost 3% in the past month, but the ETF is down almost 10% year-to-date.

China's government has gone so far as to raise reserve requirements for banks and has raised downpayment requirements for first- and second-time home buyers along with a ban on purchase of third homes.


AgBank Readies $23 Billion IPO

AgBank Readies $23 Billion IPO

June 15, 2010 (Chinavestor) The Agricultural Bank of China is preparing to raise $23 billion through an initial public offering that will be the world's largest and list the bank's shares in both Hong Kong and Shanghai.

AgBank was founded by the dictator Mao Zedong in the 1950s. Some estimates had put the value of the IPO as high as $30 billion, but recent declines in Chinese equity markets have resulted in a lower offering price.

On Monday, Xinjiang Goldwind Science & Technology Co. scuttled plans for a $1.2 billion IPO. The Hong Kong portion of the AgBank offering sought to raise up to US$14.4 billion, according to the China Post. That includes a 15% over allotment. The Hong Kong portion offering is expected to equal 53% of the IPO.

Industrial and Commercial Bank of China (HKG:1398) previously held the record for the largest IPO, raising $21.9 billion in October 6, 2006. The first successful large bank IPO belongs to Bank of Communication (BoComm) (HKG:3328), where HSBC Plc. (NYSE:HBC) locked in a 20% stake at a significant discount back in June 2005. Bank of China (HKGF:3988) can next a year later, raising as much as $11.2 billion in June 2006.

IPO of Agriculture Bank of China will be different from previous mega bank IPOs in a sense that no major foreign financial institution will underwrite the max. allowed 20% stake. It is a proof that China doesn't need foreign capital nearly as much as back in 2005 and 2006.

AgBank, China's third-largest bank, has 24,000 branches. The Hong Kong-listed shares are expected to debut on July 16.

Xinjiang Goldwind Delays $1.2B IPO

Xinjiang Goldwind Delays $1.2B IPO

June 14, 2010 (Chinavestor) Xinjiang Goldwind Science & Technology Co., the Chinese wind turbine maker, scuttled plans for a $1.2 billion initial public offering in Hong Kong due to what the company called poor market conditions.

The company said it won't move forward with its planned IPO “in light of the deterioration in market conditions and recent unexpected and excessive market volatility." Those remarks were made in a statement issued by the company.

Goldwind is listed in Shenzhen and dropped its plans to list its shares in Hong Kong after the Hang Seng Index has declined by 10% since early April, according to Bloomberg News. Europe's sovereign debt crisis has tempered investor interest in risky assets, including Chinese equities.

Goldwind got almost all of its 2009 sales from Chinese customers and was hoping to use proceeds from the IPO to fund international expansion in markets such as Australia and the U.S., Bloomberg reported. The company planned to sell 395.3 million shares at between HK$19.80 and HK$23, which would have been good for 15% of the company.

China Stock Earnings Calendar June 14-18, 2010

China Stock Earnings Calendar June 14-18, 2010

June 17, 2010 (Chinavestor) The following Chinese companies are scheduled to report financial results for the first quarter ended March 31, 2010 starting June 14.

The week is extremely light, only Chindex International (NASDAQ:CHDX) is scheduled to report.


Energy, airline, telco stocks lifts China ADRs

Energy, airline, telco stocks lifts China ADRs

June 10, 2010 (Chinavestor) Chinese solar stocks took the lead on Thursday by noon, buoyed by strong earnings, firmer euro and raising oil prices. Yesterday's top solar stocks continue to do well - Yingli Green Energy (NYSE:YGE) and Trina Solar (NYSE:TSL) jumped 9.88% and 6.71%, respectively. Suntech Power (NYSE:STP), another sector heavy weight, rose 7.38% by noon.

Synutra International (NASDAQ:SYUT) jumped 7.93% following better-than-expected earnings from last night. A-Power Energy Generation Systems (NASDAQ:APWR) beat estimates this morning and guided higher, resulting in a 20% jump in share price by noon.

Chinese airliners shine as well. Shares of China Eastern Airlines (NYSE:CEA) and China Southern Airlines (NYSE:ZNH) rose 4.54% and 6.16%, respectively. H-shares of both airliners advanced similarly in Hong Kong earlier the day.

There are only two large cap, market cap of $500 million or more,  China ADRs that are in the red for the day so far. Online game developer and operator Inc. (NASDAQ:NTES) and Perfect World (NASDAQ:PWRD). The weakness is sector specific as the sector continues to struggle with regaining investors' confidence. While revenues improved, profitability worsened for most online gamers for the first three months of the year. Earnings From Online Gaming Firms A Mixed Bag.

This is in sharp contrast to the solar sector where almost every company beat estimates and issued higher guidance. China solar stocks shine.

On the earnings front, Synutra International (NASDAQ:SYUT) returned to profitability while beating analysts' estimates easily. Synutra swings back to profit!

A-Power Energy Generation Systems (NASDAQ:APWR) reported before the opening bell. Revenues were not that impressive but earnings and just as importantly, improved revenue guidance of $500 million vs. $380 estimated, lifted the stock price over 20% to $9 a share. A-Power jumps 20% on guidance, earnings.

Solar stocks got a lift from the stronger euro and oil prices. Trina Solar (NYSE:TSL) was the best performing China solar play yesterday followed by Yingli Green Energy (NYSE:YGE). Both continue to do well on Thursday. Suntech Power (NYSE:STP) is playing catch up with the rest of the sector. And just how much the euro-dollar rate influences the bottom line of Chinese solar companies, read Solar stocks and the dollar.

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