1.Jan-April Total Profit of State-Owned Enterprises Was 1,282.36 Billion, Down 3.6% YoY
According to the data released by the Ministry of Finance, from January to April, the total operating income of state-owned enterprises was 24,572.31 billion yuan, a year-on-year increase of 9.8%. Among them, central state-owned enterprises were 14135.96 billion yuan, an increase of 11.8% year-on-year; local state-owned enterprises were 10436.35 billion yuan, a year-on-year increase of 7.2%. From January to April, the total profit of state-owned enterprises was 1,282.36 billion yuan, a year-on-year decrease of 3.6%. Among them, central enterprises were 986.22 billion yuan, a year-on-year increase of 3.8%; local state-owned enterprises were 296.14 billion yuan, a year-on-year decrease of 22.2%.
2.Beijing BIRC Signals Financial Institutions to Boost Loan Delivery and Bailouts
The Business Management Department of the CCP Central Bank, the Beijing Bureau of Banking and Insurance Regulatory Commission, and the Beijing Municipal Bureau of Financial Supervision held a symposium on currency and credit for banking institutions in Beijing. The meeting called for all financial institutions to make good use of monetary policy tools, make efforts to increase and speed up the issuance of loans to enhance the stability of the growth of total credit. It says that it is necessary to strengthen bailouts and assistance, and promptly implement various policies and measures recently introduced to support and stabilize market players. The regulators also stressed that financial institutions should not discretionally withdraw, cut off, or suppress loans for difficult enterprises affected by the CCP virus epidemic, and should support small, medium and micro enterprises, individual industrial and commercial households, truck driver loans, personal housing and consumer loans.
3.The Number of IPO Listings Decreased By 30%
Wind data shows that as of May 26, a total of 136 companies have completed listing on A-shares during the year (excluding listing transfer and share-swap absorption merger), with a total fundraising of 272.361 billion yuan. In the same period last year, the figures were 199 and 141.926 billion yuan respectively. Affected by the two super-large IPO projects of China Mobile and CNOOC, the raised funds increased by nearly 92% year-on-year, but the number of listed companies decreased by 32% year-on-year. In addition, many IPO projects chose to withdraw voluntarily and more than 100 projects were forced to suspend due to factors such as the CCP virus epidemic and financial report updates.
4.SAFE Releases Data on China’s External Portfolio Investment Assets at the End of 2021
The State Administration of Foreign Exchange (SAFE) releases data on China’s external portfolio investment assets by country/region and by sector of resident holder at the end of 2021.The statistics show that China’s external portfolio investment assets (excluding reserve assets) amounted to USD 979.7 billion by the end of 2021, including USD 648.4 billion in equity investments and USD 331.3 billion in bond investments. The top 5 recipients of Chinese investments were Hong Kong SAR, the United States, Cayman Islands, the British Virgin Islands and the United Kingdom, with the amounts being USD 434.2 billion, USD 204.5 billion, USD 83.0 billion, USD 70.0 billion and USD 24.6 billion respectively.
By the end of 2021, other financial corporations (non-bank financial institutions), non-financial sector and banks were the main sectors holding external portfolio investment assets, with the amounts being USD 390.4 billion, USD 351.2 billion and USD 238.1 billion respectively, accounting for 40 percent, 36 percent and 24 percent of China’s total external portfolio investment assets.
5.Shenzhen Securities Regulator Notified 3 Violation Cases Involving Galaxy Huijin and Essence Securities
Shenzhen Securities Regulatory Bureau’s “Securities and Futures Institutions Supervision Newsletter” (2022 Issue 3) recently notified 3 typical cases in the jurisdiction, including trading system defects, insufficient control of WeChat group speech, and investment consulting institutions failing to keep business files as required. According to the comparison of Jiemian News reporters, three institutions, Galaxy Huijin, Essence Securities, and Luojia Investment Consulting, were subject to regulatory penalties due to the above-mentioned similar situations.
6.Hong Kong Ends Mutual Accounting Recognition Accord With US
The mutual accreditation arrangement between Hong Kong’s accounting profession and the US industry may be decoupled by the end of this year, raising concerns about whether Hong Kong’s status as an international financial center can be maintained. The accord will expire on December 31,2022, the Hong Kong Institute of Certified Public Accountants said in a statement. The agreement was last renewed in 2020 and allows certified accountants in the Asian financial hub and the US to practice in each other’s markets. The statement mentioned that since the relevant agreement came into effect, American accountants who wish to practice in Hong Kong need to have one year of work experience in Hong Kong before they can apply to become certified public accountants in Hong Kong. Applicants from the United States in the past cannot substitute work experience in Hong Kong with experience in the United States; otherwise, they can only become ordinary members of the association.
7.Macau Hotel Occupancy Rate Drops To 29.5% In April
The average occupancy rate of Macau’s hotel rooms fell by half year-on-year and by 0.9% sequentially to 29.5% in April, impacted by ongoing travel restrictions across much of mainland China. According to information from the Statistics and Census Service (DSEC), April’s occupancy rate compared with a rate of 59% in April 2021 and 30.4% in March 2022. The number of guests of hotel establishments in April fell by 46.9% year-on-year to 369,000, with mainland guests down by 59.5% to 244,000. Local guest numbers surged by 55.8% to 95,000 while the average length of stay grew by 0.1 nights year-on-year to 1.7 nights.
8.Evergrande Discussing Staggered Payments, Debt-To-Equity Swaps For $19 Bln Offshore Bonds
China Evergrande Group (3333.HK) is considering repaying offshore public bondholders owed around $19 billion with cash instalments and equity in two of its Hong Kong-listed units, two sources said, as the world’s most indebted developer looks to emerge from its financial woes. Evergrande, whose entire $22.7 billion worth of offshore debt including loans and private bonds is deemed to be in default after missing payment obligations late last year, said in March that it will unveil a preliminary debt restructuring proposal by the end of July. The first source said up to 20% of the offshore debt can be swapped into equities of those two units. The restructuring proposals are, however, at an early stage and are subject to change, the source added.
【G Translators- Financial Team】