4/12/2021 Financial News: Rising CPI and PPI in Communist China, Goldman Sachs & Morgan Stanley to Lead Didi’s IPO

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1.Communist China’s Consumer and Factory Prices Rose in March

Based on the March data released by the National Bureau of Statistics on Friday, Communist China’s consumer price index (CPI) rose 0.4% from a year earlier. Food prices fell by 0.7% in March, and pork prices fell by 18.4%. Non-food prices rose 0.7% from a year earlier.

In March, Communist China’s factory-gate prices jumped to the highest level in over two years. The producer price index (PPI) rose 4.4% in March from a year earlier. On a monthly basis, the PPI rose 1.6% in March from February, according to the National Bureau of Statistics. The bureau said the rising industrial prices were mainly due to higher global commodity prices, especially oil. Among the 40 industrial sectors surveyed, 30 sectors experienced price increases, 6 sectors saw price declines, and 4 maintained same prices.

2.Goldman Sachs & Morgan Stanley to Lead Didi Chuxing’s IPO in U.S.

Hong Kong (Reuters) – Communist China’s top ride-hailing company Didi Chuxing has selected Goldman Sachs and Morgan Stanley to lead its confidential IPO, which may happen as soon as July. Confidential IPO filings allow companies to keep key operational and financial information away from competitors for a few additional months. This announcement indicates the company is moving forward in its listing plans. As Reuters reported last month, Didi could raise about $10 billion if it sells 10% of its shares. The U.S. capital pool continues to attract Chinese companies despite intensified tensions between the two countries. Didi, Goldman and Morgan Stanley declined to comment.

The nine-year-old company is backed by Asian technology investment giants SoftBank, Alibaba and Tencent. It offers transport services via its mobile app where users can hail taxis, privately owned cars, car-pool options and even buses in some cities.

3.Second-Hand Housing Mortgages Suspended in Guangzhou?

According to some netizens, Bank of China, Postal Savings Bank of China, Bank of Communications, Ping An Bank and other banks in Guangzhou suspended their second-hand mortgage business. The reporter verified that although these banks did not fully suspend the second-hand mortgage loan business in Guangzhou, they did not rule out the suspension of such loans in some branch outlets.

For example, the Guangdong Branch of Bank of China stated that second-hand mortgages in Guangzhou have not been suspended. Yet, due to the impact of the regulation, the quota has been reduced to a certain extent, and the processing of mortgages has slowed down.

4.Another Pilot of Digital Yuan Launched in Shenzhen

Another round of pilot of the digital yuan was recently launched in Shenzhen to provide 500,000 people with a total of 10 million yuan in promotional discounts. The goal is to further cultivate people’s habit of using digital yuan. Data show that more than 30,000 merchants in Shenzhen have installed the digital yuan transactional system. 478 of these merchants are participating in this event. Shenzhen’s digital yuan pilot project was first launched last October with over 40,000 people receiving digital yuan red envelopes.

5.Anjuke Group’s Hong Kong IPO Application Despite Soaring Debt

Shanghai-based online property brokerage Anjuke Group filed an IPO application with Hong Kong stock exchange on Thursday. The Tencent-backed company didn’t disclose the size or timetable for the IPO, which is being sponsored by BofA Securities, CICC and Credit Suisse. Based on the company’s application draft, Anjuke is the largest online property listing platform based on the numer of monthly active users. It had an average of 67 million mobile monthly active users of 67 million in the fourth quarter. And its online marketing platform for new and existing properties is the largest by revenue, the company said.
However, Anjuke’s debt ratio soared from 17.49% at the end of 2019 to 92.74% at the end of 2020. Its total debt also increased from 2.272 billion yuan at the end of 2019 to 15.66 billion yuan at the end of 2020. The company was also recently investigated by the Beijing Municipal Commission of Housing and Urban-rural Development.

6.Biden Administration Increases Scrutiny of Digital Yuan’s Threat

(Bloomberg) – The Biden administration increases its attention on Communist China’s digital yuan and its potential threat to the dollar. Some officials are concerned its digital currency plan may threaten the dollar as the global dominant reserve currency, said people familiar with the matter. Officials at the Treasury, State Department, Pentagon and National Security Council are stepping up their efforts to examine the potential implications. American officials are trying to determine not only how the digital yuan will be distributed but also whether it can be used to circumvent U.S. sanctions. Members of Congress have also shown increasing interest in a digital dollar. They asked Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen about the issue in hearings earlier this year.

By 【Financial Team – Kate】

News Collection: Totoro、Kate

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