China Buys Record Japan Debt in July

Chandrasekhar Atreya
09 Sep, 2010
New York City

Stocks in China fell after commodity and financial shares declined today. China bought record amount of Japanese government debts in July. Shanghai registers a record residential plot sale in Pudong New Area.

[R]5:00 PM Hong Kong, China – Stocks in China fell after commodity and financial shares declined today. China bought record amount of Japanese government debts in July. Shanghai registers a record residential plot sale in Pudong New Area.[/R]

China’s key stock index lost more than 1% in the morning trade after commodity producers retreated from earlier gains and financial shares plunged. The index lost further in the afternoon session.

However stocks in Hong Kong gained in trade to close higher.

The CSI 300 Index in China lost 1.83% or 54.51 to close at 2,926.46. The Hang Seng Index in Hong Kong gained 0.37% or 78.41 to close at 21,167.27.

China bought a record amount of Japanese debt this year when it purchased a net of 640.8 billion yen in short-term bills in July. China’s total purchase of Japanese debt rose to about 2.3 trillion yen this year, a record since data started to be collected in 2005.

The market expects more Japanese debt to be bought as China diversifies its foreign exchange reserve allocation.

The Taiwan Depository Receipts of Yangzijiang Shipbuilding Holdings Ltd, the first Chinese mainland company to list on the island, made a strong debut on the Taiwan Stock Exchange Wednesday, with its shares nudging the maximum daily rise allowed.

The scrip started trading at NT$20.10 at a 6.91% premium above its TDR offering of NT$18.80, very close to the daily maximum of 7% rise in a day allowed.

China Mobile Ltd lost almost 4% Wednesday after Vodafone sold its stake in the company for $6.5 billion nearly double what it paid. Analysts sounded optimistic note and said that despite the sale the company’s long term fundamentals are positive.

A land parcel adjacent to little Lujiazui in the Pudong New Area was sold for record residential plot price in Shanghai after a Hong Kong developer paid a price of 35,490 yuan per square meter.

A subsidiary of The Wharf (Holdings) Ltd agreed to pay a total of 4.8 billion yuan for the 54,415 square meter plot, beating two rivals, including fellow Hong Kong developer Sun Hung Kai properties.

EDF Group, France based electricity group approved late Tuesday a plan to sell its U.K. electricity distribution networks to Cheung Kong Infrastructure Holdings Ltd, saying this would help to cut 6.8 billion euros in the group’s net debt.

The board of EDF gave the green signal following Hong Kong-based Cheung Kong group’s irrevocable offer on July 29, worth 3.2 billion pounds in equity.

China’s securities regulator implemented further rules to improve the pricing mechanism of IPOs as part of its continuing campaign to cool high valuations to bring down IPO prices and alleviate over-subscription of new issues.

IPOs have long been a favorite of individual investors on the mainland and that’s prompted some institutions to quote unreasonably higher prices in the book-building process so they can secure share allotments and sell them to retail investors in the secondary market.

Global express giant TNT will invest an additional 1.5 billion yuan in its wholly-owned Chinese subsidiary TNT Hoau as it seeks to double revenue within five years. The investment will go towards factories and vehicles and information technology system as well as training professionals, said Xu Shuibo, CEO of Hoau, Wednesday in Shanghai.