9/18/2021 Financial News In China: Evergrande’s Correspondent Bank Plans To Extend Loans; BSE Individual Investors’ Funds Threshold 500k Yuan

1.Evergrande’s Correspondent Bank Plans To Extend Short-term Loans

Four banking executives told Reuters that some of the major banks of Evergrande Group, a Chinese real estate developer in a debt vortex, have already made provisions for losses on Evergrande-related loans, while some other banks plan to extend short-term loans. A bank executive said that the Agricultural Bank of China has already set aside partial loan loss reserves to prudently respond to the real estate loan to Evergrande.  At the same time, Evergrande’s other two major lending banks, Minsheng Bank and China CITIC Bank, are preparing to extend some short-term loans, according to two sources familiar with their respective situations.  Agricultural Bank of China, Minsheng, CITIC and Evergrande did not immediately respond to email requests for comment. According to four banking sources, the exposure of Chinese banks to Evergrande loans has declined in the past year, and most loan balances are guaranteed by collateral or certificates of deposit.

2.The BSE Says The Threshold Of Individual Investors’ Funds Is 500,000 Yuan

The Beijing Stock Exchange announced on Friday that the capital threshold for individual investors is that the average daily securities assets of the 20 trading days before the opening of the trading authority are not less than 500,000 yuan, and the appointment of account opening will be launched from today.  The document also stated that, in addition to the above-mentioned access requirements, individual investors need to have more than 24 months of experience in securities trading.  Starting from the date of this announcement, eligible investors can apply to the securities company entrusted by them to make an appointment to open the trading authority of the Beijing Stock Exchange.  On the same day, the National Equities Exchange and Quotations also issued an announcement on the revision of the “Measures for the Management of Investor Suitability of the National Equities Exchange and Quotations System for Small and Medium-sized Enterprises”, which lowered the threshold for investors in the innovation layer of the New Third Board from 1.5 million yuan to 1 million yuan, which will be implemented today.  

3.Japan: Objectively Consider China’s Application To Join The CPTPP

Japan stated that it needs to judge whether it is “prepared” to join the Trans-Pacific Trade Agreement based on China’s actual situation.  Earlier, Beijing unexpectedly formally applied to join this agreement originally designed by the United States to limit China’s influence in the region.  Japan stated that if China is to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) initiated by the then-U.S. President Barack Obama, Beijing will need to pay attention to intellectual property rights, state subsidies and state-owned enterprises.  And other fields need to meet the requirements of the agreement.  Japan stated that if China wants to join the Trans-Pacific Trade Agreement originally initiated by Obama, it needs to meet the requirements of the agreement in areas such as intellectual property rights, state subsidies and state-owned enterprises.

4.The RMB Closed Slightly Down

The renminbi against the U.S. dollar closed slightly down on Friday, and the central parity dropped by nearly 200 points to hit a one-week low.  Traders said that the positive U.S. retail data once again ignited expectations of the Federal Reserve (FED) tightening, and the U.S. index rebounded to a half-month high overnight;  Before the interest rate meeting, the renminbi will continue to fluctuate within a range and there is no direction for the time being.  They also pointed out that the People’s Bank of China’s operations at the end of the quarter to maintain stability in the open market eased market liquidity tensions, and cross-season swap points have also fallen. Among them, one-year swaps have fallen from a high of 1,843 points at the beginning of the week to 1,744 points;  The seasonal impact is declining, and the swap curve is expected to gradually return to normal.  “Yesterday, the U.S. index rebounded, and some US dollar/renminbi short stop losses could be seen. However, after opening lower at around 6.46 in early trading, a larger settlement order emerged,” said a trader at a Chinese bank.

5.Wanda Hotel Development: Sunac Will Compensate 133 Million

On the evening of September 16, Wanda Hotel Development (00169.HK) announced that its two subsidiaries and Sunac China (01918.HK) reached an agreement on the early termination of 21 hotel management agreements. Sunac China will pay Wanda 133 million  Yuan was used as termination compensation, and 68.59 million yuan was paid to Wanda to settle all outstanding accounts payable between Wanda and Wanda as of June 30, 2021.  The Paper (www.thepaper.cn) learned that, in accordance with the original agreement between the two parties, the term of the contract agreement for the 21 hotels managed by Sunac to Wanda is 20 years, which expires in 2037. The 21 hotels include 19 hotels that are in operation and 2 hotels that are under construction and have not yet started operations.

6.Hysan Acquires Shanghai Property From Cheung Kong For 3.5 Billion Yuan

Hong Kong real estate investment company Hysan Development 0014.HK announced on Friday that it will acquire the Shanghai “Century Plaza” office building project from Cheung Kong Holdings 1113.HK at a consideration of 3.5 billion yuan.  Cheung Kong responded that Hong Kong and the Mainland were its key markets for the sale of projects in the Mainland, and its senior group consultant Li Ka-shing. Hysan’s announcement stated that it would acquire all the equity of the target company from Cheung Kong, which is currently the indirect holder of 60% of the equity of the project company (the registered owner of the property).  The acquisition will only be implemented after the seller acquires the remaining 40% equity of the project company through an intermediary holding company.  After the completion of the acquisition, Hysan will wholly own the property.  Cheung Kong stated that this property sales is one of the group’s daily sales operations as a real estate company. Cheung Kong’s revenue from this sale is 2.1 billion yuan (which accounts for 60% of the project’s equity).  In the past 10 years, Cheung Kong’s property sales in the Mainland have averaged approximately HK$29.8 billion per year.

7.CDH Investment Joins China Resources Liquor Industry, Holding 20% ​​of The Shares

The official website of the Anti-Monopoly Bureau of the State Administration for Market Regulation issued the “Case of Acquisition of the Equity of Shandong Jingzhi Liquor Co., Ltd. by China Resources Liquor Holdings Co., Ltd. and Jiaxing Dinghui Zunke Equity Investment Partnership (Limited Partnership)” (hereinafter referred to as the “Plan”),  The “Plan” announced for the first time the equity distribution of Jingzhi Liquor.

The “Plan” shows that in this acquisition, China Resources Wine Holdings Co., Ltd. and Jiaxing CDH Zunke Equity Investment Partnership (Limited Partnership) intend to acquire Shandong Jingzhi, a wholly-owned subsidiary of Shandong Jingzhi Wine Co., Ltd. through capital increase.  Zhibaijiu Co., Ltd. owns a total of 60% of the equity.  After the completion of the transaction, China Resources Liquor will hold 40% equity in Jingzhi Liquor, CDH Investment will hold 20% equity in Jingzhi Liquor, Jingzhi Liquor will hold the remaining 40% equity in Jingzhi Liquor, and China Resources Liquor  Jingzhi Liquor Industry, Jingzhi Liquor Industry and CDH Investment jointly control Jingzhi Liquor under the anti-monopoly law.

8.Ganfeng Lithium Industry Subsidiary Plans To Increase Capital In Jintai Potash

China’s leading lithium mine-Ganfeng Lithium announced on Friday evening that its wholly-owned subsidiary Qinghai Liangcheng intends to increase its capital in Jintai Potash by RMB 705 million with its own funds. After the capital increase, it will hold 15.48% of Jintai Potash’s equity.  .  The announcement published by the Shenzhen Stock Exchange also shows that according to the requirements of the partner agreement, Jintai Potash must ensure that all lithium products produced by itself, cooperatively produced or commissioned and 70% of the brine raw materials to be sold directly to the outside world (the equivalent of lithium carbonate is 5,000 tons/year) sold to Qinghai Liangcheng. Ganfeng Lithium A shares closed down about 3% on Friday, but investors have continued to pursue new energy vehicle-related companies, and the stock has risen nearly 70% so far this year.  Its Hong Kong stocks closed up 1.3% on Friday, a cumulative increase of nearly 60% this year.

By【G-translators Financial Team】
Author: 雪梨

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