China Business Digest: HKEX Chief to Step Down at Year-End; Indebted Evergrande Gets Relief With Shareholders’ Deal
Hong Kong exchange chief Charles Li to retire at year-end. China moves to normalize monetary policy as economy stabilizes. Embattled Evergrande gets relief to avoid a cash crunch, and developers in China issue more bonds by value in the third quarter than in any of the same periods in previous years. And, the Covid-19 pandemic notched two major milestones, with the global death toll passing 1 million and the number of infections in India reaching 6 million.
— By Guo Yingzhe (firstname.lastname@example.org) and Han Wei (email@example.com)
** TOP STORIES OF THE DAY
Charles Li to step down as HKEX chief at year-end
Charles Li, chief executive of the Hong Kong stock exchange, will step down sooner than expected at the end of 2020, the bourse said Tuesday in a filing. Li informed the board of the Hong Kong and Clearing Ltd. (HKEX) that he wished to retire early from his role as chief executive on Dec. 31, instead of the previously planned October 2021. He will take on a role as senior adviser to the board for six months starting Jan. 1 to ensure a smooth transition.
China moves to normalize monetary policy as economy stabilizes
China’s central bank is seeking to normalize monetary policy as the “economy recovers steadily” in another sign that the country’s policymakers are gradually pulling back from the stimulus measures enacted amid the Covid-19 pandemic. The People’s Bank of China said Tuesday it will make monetary policy more precise and targeted to achieve a long-term balance between stabilizing growth and preventing risks.
Indebted developer Evergrande gets relief
China Evergrande Group said it reached an agreement with a group of strategic investors to avoid repayments that would have placed a major strain on the company’s balance sheet, a key step to avoid an immediate cash crunch. Evergrande said Tuesday that investors holding equity stakes worth about 86.3 billion yuan ($12.7 billion) agreed to keep their shares and not require the company to buy them out.
Real estate developers increase bond issuance in Q3
Property firms in China issued domestic and overseas bonds totaling 324.7 billion yuan ($47.6 billion) from July 1 to Sept. 24, a record high for any third-quarter period, according to data (link in Chinese) compiled by real estate research platform Beike Research Institute.
Profits of Weibo soar, even as revenue falls
Chinese social media platform Weibo Corp. reported a year-on-year jump of 92.6% in net profit in the second quarter of 2020, despite a 10% net revenue decline. (Read the full story.)
Weibo’s parent company Sina Corp. has agreed to go private after an entity led by its chairman, Charles Chao, boosted its offer for the Nasdaq-listed Chinese social media company to $43.3 a share in cash.
Top court’s interest-rate ruling sends shockwaves through China’s financial sector
A ruling by China’s highest court that slashed the cap on legally protected interest rates on private loans has sent shockwaves through the financial sector — not only for the informal lending industry, the main target of the change, but for the entire banking system. (Read the in-depth story.)
Troubled Kangde Xin may be delisted due to $1.7 billion fraud
Scandal-plagued Kangde Xin Composite Material Group Co. Ltd. may be delisted from the Shenzhen bourse after an over 20-month probe into one of the most high-profile corporate frauds in Chinese stock market history. (Read the full story.)
TikTok ban by Trump most likely exceeded authority, judge says
A federal judge in Washington said he blocked the Trump administration’s proposed ban on the popular Chinese-owned TikTok app Sunday because the U.S. government most likely overstepped its authority. (Bloomberg)
** OTHER STORIES MAKING THE HEADLINES
Economy & Finance
• Taiwanese banks’ contributions to offshore loans for Chinese mainland firms fell to their lowest levels in at least 10 years as lenders become increasingly anxious to limit their credit exposure to the economic fallout of the pandemic and rising political tensions. (Bloomberg)
• South Africa and China are working on a new 10-year strategic program for cooperation, as the current one nears its end. (Bloomberg)
Business & Tech
• Leading online travel agent Trip.com Group Ltd. said on Tuesday the central bank has approved its application to acquire a Shanghai-based state-owned payments company, making it the latest of China’s internet majors to seek a payment license. (Read the full story.)
• Jiaxing Taimei Medical Technology Co. Ltd., a Chinese provider of tech-enabled life science solutions, has secured over 1.2 billion yuan in a new funding round. (Deal Street Asia)
• A state-owned enterprise controlled by the Guangzhou Economic and Technological Development Zone has agreed to invest 4 billion yuan to support Chinese electric-vehicle startup Xpeng Inc.’s development, as the carmaker began exploring business opportunities in the overseas markets. (Read the full story.)
• Alibaba Group Holding Ltd. consolidated several office tool businesses (link in Chinese), including its WeChat-like Ding Talk and video cloud services, into a single division to better serve institutional clients.
• Shares of Chinese delivery firm ZTO Express (Cayman) Inc. opened at HK$244 ($31.50) in their Hong Kong debut on Tuesday, up from their IPO price of HK$218. The company said it expected to raise about HK$9.8 billion from the listing, which complements its existing listing in New York.
** ON THE CORONAVIRUS
• The Covid-19 pandemic has passed two major milestones, with the global death toll passing 1 million and the number of Indian infections edging past 6 million, according to data compiled by Johns Hopkins University.
The number of global infections had passed 33.3 million as of Tuesday afternoon Beijing time. India remained the country with the second highest number of confirmed cases, behind only the U.S., whose caseload to date totaled 7.15 million.
• The Chinese mainland reported (link in Chinese) 12 new symptomatic Covid-19 infections on Monday, all imported. The mainland also added 26 asymptomatic cases, also all imported.
• Japan plans to gradually lift overseas travel alerts in October in a bid to spur the removal of entry restrictions implemented in other countries. (Nikkei Asian Review)
Caixin’s coverage of the new coronavirus
Some baby pandas that were born this year made their public debut Tuesday at the Chengdu Research Base of Giant Panda Breeding in Southwest China’s Sichuan province.
** LOOKING AHEAD
Sept. 30: Release of Caixin China manufacturing PMI
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