Investment Finance and Business: china

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2012年2月25日星期六

China issues green-credit guideline for banks

The Chinese government introduced a “green credit” guideline for commercial lenders on Friday to facilitate economic restructuring in a manner that’s environmentally friendly and saves energy.
The China Banking Regulatory Commission, the top banking regulator, ordered lenders to cut loans to industries with high-energy consumption and high levels of pollution or excessive capacity, and to strengthen financial support for green industries and projects.
The CBRC encouraged banks to evaluate, classify and rate the environmental and social risks inherent in their clients’ businesses and take the results as a key reference in their ratings and access to credit.
“Through credit controls, banks can have an influence on businesses’ awareness of energy savings, emissions-reductions and the benefits to the public,” said Yan Yanfei, deputy director-general of the statistics department at the CBRC.
He said that in the next step, the CBRC will set up some key indexes to make the guideline more specific and try to include adherence to the plan in the rating system.
Lenders also need to improve management of any overseas projects that they support, to ensure that the initiators of those projects comply with local environmental, land, healthcare and security legislation, according to the guideline.
Zhang Rong, the programme manager of environment and social standards at the International Finance Corporation of the World Bank Group, said the guideline is welcome, especially given the increased involvement of Chinese enterprises in the global market, and the increasing number of calls urging the overseas projects to take more care of the local environment and to reduce energy use.
“Actually Chinese banks have already made very good attempts at green credit, and they can learn from the mature technology and management systems that their international counterparts have already been using for some time,” Zhang said.
China Development Bank Corp, which makes nearly half of the total loans supporting overseas projects of Chinese enterprises, has just provided credit to a Chinese company that operates an iron ore mine in Africa. The funds will help the company move surface soil to a place of safety to protect the seeds of local plants, according to Lu Hanwen, deputy director-general of CDB’s Project Appraisal Department II.
By the end of 2011, CDB had lent 658 billion yuan ($104 billion) to support environmental protection, energy-saving and emissions-reduction projects, accounting for 12.7 per cent of the bank’s total outstanding loans.
Yang Bin, deputy general manager of Corporate & Investment Banking at Shanghai Pudong Development Bank Co Ltd, said banks have enough motivation to lend green credits because the demand from clients that they undertake green initiatives has been rising constantly.
Such loans have a lower non-performance ratio than other lending because enterprises can usually obtain strong incentives for green projects from the government to repay the loans, he said.
“And the rate of return against cost for green credits is much higher than other lending,” said Yang, adding that evaluating the environmental impact and energy-consumption of their clients will cost the banks little.
“But State-owned enterprises should also be ordered to implement green policies if the government wishes to achieve its energy-saving and emissions-reduction goals,” Yang said.

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2012年2月22日星期三

NI Technology Updates Outlooks for First Solar, Trina Solar, Yingli Green Energy, Hewlett-Packard, and Marvell …

PRINCETON, N.J., Feb. 22, 2012 /PRNewswire/ – Next Inning Technology Research (http://www.nextinning.com), an online investment newsletter focused on semiconductor and technology stocks, has published updated outlooks on First Solar (Nasdaq: FSLR – News), Trina Solar (NYSE: TSL – News), Yingli Green Energy (NYSE: YGE – News), Hewlett-Packard (NYSE: HPQ – News), and Marvell Technology Group (Nasdaq: MRVL – News).
Next Inning readers leverage the insight you can only get from an industry insider. Next Inning editor Paul McWilliams was a tech industry executive for more than two decades. Not only does he know how things work from the inside and how to spot a winning business model, he also has a long and successful record of picking winning stocks. Year to date in 2012 these picks have driven a 24% gain for the Next Inning Model Portfolio. Since its inception in 2002, the model portfolio is up over 300%.
McWilliams‘ latest reports have the tech world buzzing. Recently, he covered Apple suppliers most likely to leverage the tech giant’s huge success, while warning investors about selected companies that may not always be able to count on Apple’s business. McWilliams has also put out a new report covering a massive, potentially paradigm-shifting project by Google that will see the search giant roll out ultra-fast internet service, making winners out of select suppliers and posing a big threat to incumbent firms. These reports are essential reading, unavailable except via free trial subscription to Next Inning.
To get ahead of the Wall Street curve, you are invited to take a free, 21-day, no obligation trial with Next Inning. For full details on this offer, please visit the following link:
https://www.nextinning.com/subscribe/index.php?refer=prn1368
McWilliams covers these topics and more in his recent reports:
– After advising Next Inning subscribers to exit First Solar in April 2010 when it was trading above $130, does McWilliams see opportunities in the sector among names like First Solar, Trina and Yingli? Does McWilliams trust the rally that the solar sector has experienced this year, or should investors be cautious and lock in profits? What is the primary challenge when it comes to investing in the “solar economy?” Why does China have many reasons to fund solar initiatives as compared to the U.S.?
– McWilliams suggested selling HP in late 2010 when the stock was trading at $43.50. Now that HP has hired Meg Whitman to run the show, does he think it’s time to buy back in? What other aspects of the HP story does McWilliams think investors need to evaluate carefully before making a final buy decision?
– Does McWilliams view the impact on Marvell from flooding in Thailand to be just a short-term issue for the stock? Is Marvell’s current valuation unrealistic when considering its growth potential? What is McWilliams’ fair value estimate for Marvell and how much upside does it represent from current prices?
Founded in September 2002, Next Inning’s model portfolio has returned 305% since its inception versus 50% for the S&P 500.
About Next Inning:
Next Inning is a subscription-based investment newsletter that provides regular coverage on more than 150 technology and semiconductor stocks. Subscribers receive intra-day analysis, commentary and recommendations, as well as access to monthly semiconductor sales analysis, regular Special Reports, and the Next Inning model portfolio. Editor Paul McWilliams is a 30+ year semiconductor industry veteran.
NOTE: This release was published by Indie Research Advisors, LLC, a registered investment advisor with CRD #131926. Interested parties may visit adviserinfo.sec.gov for additional information. Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
CONTACT: Marcia Martin, Next Inning Technology Research, +1-888-278-5515
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2012年2月21日星期二

Ceptaris Secures $15M in Venture Debt Financing

MALVERN, Pa.–(BUSINESS WIRE)–
Ceptaris Therapeutics, Inc., a privately held specialty pharmaceutical company, today secured $15 million in venture debt financing from Silicon Valley Bank and Oxford Finance.
The New Drug Application (NDA) for Ceptaris’ drug candidate, mechlorethamine gel, is currently undergoing review by the U.S. Food and Drug Administration (FDA) for the treatment of early stage (stages I-IIA) mycosis fungoides, a type of Cutaneous T-Cell Lymphoma (CTCL).
Ceptaris received $7.5 million at closing and has access to the remaining $7.5 million if the NDA is approved by the FDA. The funding will be used for ongoing operational expenses and preparation for commercialization of its investigational drug, mechlorethamine gel. Ceptaris’ primary venture capital investors include Vivo Ventures, Palo Alto Investors, Burrill & Company, Osage Ventures, Aperture Venture Partners, and BioAdvance.
“We are very pleased with our venture debt relationships with both SVB and Oxford and the additional capital it provides Ceptaris for pre- and post-launch activities,” said Stephen Tullman, President and CEO at Ceptaris. “Management has worked with both lending institutions in prior companies, including Ception Therapeutics and Vicept Therapeutics, and we look forward to continuing these relationships.”
About Ceptaris Therapeutics
Ceptaris Therapeutics, Inc. is a privately held, specialty pharmaceutical company that is developing a proprietary gel formulation of mechlorethamine hydrochloride for the treatment of early stage (stages I-IIA) mycosis fungoides, a type of Cutaneous T-Cell Lymphoma (CTCL). If approved, Ceptaris’ investigational drug would be the first topical mechlorethamine product available to treat the signs and symptoms of this rare cancer. Please visit www.ceptaris.com for more information.
About Silicon Valley Bank
Silicon Valley Bank is the premier commercial bank for companies in the technology, life science, cleantech, venture capital, private equity and premium wine industries. SVB provides a comprehensive suite of financing solutions, treasury management, corporate investment and international banking services to its clients worldwide. Through its focus on specialized markets and extensive knowledge of the people and business issues driving them, Silicon Valley Bank provides a level of service and partnership that measurably impacts its clients’ success. Founded in 1983 and headquartered in Santa Clara, Calif., the company serves clients around the world through 26 U.S. offices and international operations in China, India, Israel and the United Kingdom. Silicon Valley Bank is a member of global financial services firm SVB Financial Group (Nasdaq: SIVB – News), with SVB Analytics, SVB Capital and SVB Private Bank. More information on the company can be found at www.svb.com.
About Oxford Finance
Oxford Finance is a specialty finance firm providing senior secured loans to public and private life sciences and healthcare services companies worldwide. For over 20 years, Oxford has delivered flexible financing solutions to its clients, enabling these companies to maximize their equity by leveraging their assets. In recent years, Oxford has originated over $1.5 billion in loans, with lines of credit ranging from $500 thousand to $50 million. Oxford is headquartered in Alexandria, Virginia, with additional offices in California, Illinois, Massachusetts and North Carolina. For more information visit http://www.oxfordfinance.com/.
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2012年2月20日星期一

2012年2月13日星期一

China tells banks to roll over local govt loans – FT

SYDNEY (Reuters) – China has told its banks to start a huge roll-over of loans to local governments, the Financial Times reported, aiming to give itself more time to deal with a $1.7 trillion debt hangover from the global financial crisis.
The move underscores China’s determination to contain its 10.7 trillion yuan debt mess and forestall a potential loan crisis in the world’s No. 2 economy, analysts say.
As early as June 2011, the Chinese government had vowed to clean up its local debt either by shifting 2-3 trillion yuan of debt off local governments, forcing state banks to take some bad debt losses and selling select projects to private investors, sources told Reuters earlier.
Investors worry that China’s banks would suffer billions of bad loan losses and hobble the world’s growth engine at a time of anaemic global economic growth.
China’s mountain of local debt piled up after the 2008-09 financial crisis when Beijing ordered local governments to spend massively on infrastructure projects to buoy economic growth, which they did by borrowing heavily.
Analysts say Chinese banks are already rolling over or restructuring troubled loans to cash-strapped local governments unable to repay their debt. But the amount of loans being rolled over is not known as banks — and Beijing — are tight-lipped.
Worse, analysts say Chinese banks are hiding troubled loans by adamantly refusing to mark them as non-performing loans in financial statements before restructuring them, as per global best practice.
“This is bad regulation but I don’t think we are going to get a bank crisis,” said a bank analyst in Hong Kong.
In some cases, loans are being restructured by extending their maturities by as much as four years, the Financial Times said, citing bankers and analysts familiar with the matter.
Not all local government loans would be rolled over, the paper said, citing a person with knowledge of the plan.
Banks would determine if there was real demand for the investment. Continued funding for the construction of highways would be approved but less important projects, like massive city squares, might be cut off.
Banks would also consider whether investments were consistent with the government’s five-year plan for industrial upgrading and cleaner growth.
China has said that about half of the 10.7 trillion yuan of loans will mature over the next three years.
(Reporting by Richard Pullin in MELBOURNE and Koh Gui Qing in SINGAPORE, Editing by Dean Yates & Kim Coghill)

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2012年2月6日星期一

Caixin Online: The basics of Chinese inbound investment deals

By Andrew Ross
BEIJING (
Caixin Online
) — An accelerating number of Chinese companies are engaging in acquisitions and joint ventures in the United States and while it’s generally understood that a large number of other Chinese companies are also considering doing so, many still hesitate.
The first point to note is that the rate of deals is increasing, and is doing so dramatically. A second point is that as a percentage of the total number of deals, small- to medium-size deals make up the majority, although there are a few larger ones, and the buyers are generally not SOEs (state-owned enterprises). Third, the industries of the acquired companies cover a broad range, from technology, apparel, consulting services, auto parts, hotels and many more.

About Caixin
Caixin is a Beijing-based media group dedicated to providing high-quality
and authoritative financial and business news and information through
periodicals, online and TV/video programs.
• Get the Caixin
e-newsletter

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In 2011, several Chinese companies announced their intentions to enter into deals in the U.S., including Shanghai Pharmaceuticals

, with its publicly stated reasons being to seek new drugs to expand its product line and noting declining overseas prices and a strong Yuan, Bright Food Group, China National Materials Co. (Sinoma)

and Fosun Group, which stated it is looking at consumer brands. Many Chinese companies are going global in the U.S., more and more will be doing so, and for those Chinese companies for which this makes sense and which proceed to do so, they will be in very good company.
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So what are some of the strategies, procedures and lessons on pitfalls that can be garnered from recent deals?
Perhaps one of the most important points regarding engaging in transactions in the United States is to recall the reaction of many Chinese businesses when foreign companies came to China and sought to dictate that deals in China be done in the same manner as in those companies’ respective homelands. This generated ill feelings and often did and can easily result in failure in a deal. The same is true in the United States. Companies from many different countries make acquisitions in the U.S. all the time, and one of the accepted norms is that the deal will be done in “U.S. style.”
While not successful on occasion, the advisor for the U.S. company looking to be sold (especially a “hot” company) may seek to create an auction for the company, thus seeking to maximize the price and otherwise obtain the most favorable terms. Even if they do not succeed in doing this, they will generally seek to have the process move as rapidly as possible. Prospective buyers who are unwilling to follow an auction process when established or move too slowly are simply left behind. An important aspect in dealing with this is to be prepared. This means having done industry and market analysis in advance so as to be able to readily determine one’s interest and willingness to devote the necessary resources to explore the deal, and have ready or be able to quickly assemble a team of qualified Chinese and U.S. advisors.

Clinton calls U.N. veto on Syria a ‘travesty’

U.S. Secretary of State Clinton called the veto by Russia and China of the U.N. resolution on Syria a “travesty” as Syria’s President Bashar al-Assad attended mosque service. (Video: Reuters/Photo: Getty Images)

Many U.S. businessmen object to the alleged slow deal pace of foreign businessmen (and not just Chinese), thus often giving U.S. buyers an advantage. Timing delays are, of course, a tactic to be considered; however they should only be used as deemed appropriate, such as to express reservations or concerns so as to try and enhance one’s bargaining position. However, a buyer should not allow its perceived slowness to cost it a deal it otherwise wants.
While most people properly say “a deal is not done until it is done,” in many U.S. negotiations the same often is not true of individual issues. Once an issue is resolved, it is generally not renegotiated absent special circumstances. A party which acts contrary to this undercuts its counter-party’s trust in it.
There is great significance in the U.S. placed on the transaction contract, as each party seeks to maximize its benefits and protections. As a general rule, legal counsel for a U.S. party, will seek as much protection for its client and clarity in the terms of an agreement as possible. This can be especially important for a buyer or investor. This often means lengthy detailed contracts, and also emphasizes the need for the parties to make decisions relatively quickly with respect to the many points involved. In fact, one view is that many U.S. business persons and their lawyers will only encourage ambiguity in an agreement if they think that addressing the ambiguity in the negotiations would result in it being resolved contrary to their interests or if they think they will have greater negotiating leverage on the point once the agreement is signed or the deal is consummated.
By having a contract be as detailed and precise as possible, the likelihood of a dispute is reduced. This is augmented by the fact that in the U.S. there is a very substantial body of court rulings and laws which help determine what a particular contractual phrase will mean in a particular context, thus creating even greater potential certainty. Finally, it should be recognized that other than private arbitrators and mediators and the courts — all of which are objective but the last of which is slow — no governmental entity or person such as a governmental bureaucrat plays a meaningful role in resolving contractual disputes.
While concerns abound over the possible legal burdens that Chinese companies face in the U.S., there are many reasons for Chinese companies to go global, and in particular to do so in the United States.
Read this commentary on Caixin Online.

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Andrew Ross is partner and chair of the mergers and acquisitions practice group at Loeb & Loeb LLP. This article is an abridged version of a paper titled, “Acquisitions by Chinese companies in the United States: The case for moving forward now.”

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$800 Million Chinese Fund to Back Film Projects

By MICHAEL CIEPLY

Published: February 6, 2012

LOS ANGELES — If Chinese versions of Rupert Murdoch and Oprah Winfrey teamed up with, say, China’s J. P. Morgan to start a film fund, this would be it.

Sun Media Group, founded by Bruno Wu, who is often compared to Mr. Murdoch, and his wife, Yang Lan, sometimes likened to Ms. Winfrey, is joining Harvest Fund Management to create an $800 million fund that will back entertainment ventures in China and around the world, company executives said Saturday. “The goal is pretty straightforward; it’s to make a maximum return, of course, for the investors,” Mr. Wu said of the enterprise, which is aimed at a booming Chinese market for global film. He and Lindsay Wright, the vice chairman of a Harvest global investment unit, spoke jointly by telephone.

The fund, called Harvest Seven Stars Media Private Equity, is expected to invest in existing entertainment companies. But it also will provide backing for individual filmmakers and build an entertainment distribution system in China and elsewhere, Mr. Wu and Ms. Wright said. Its initial pool of capital, they added, will probably be expanded in the near future.

Last year, the Motion Picture Association of America said it expected the number of cinema screens in China to increase to more than 16,000 in 2015 from about 6,200 in 2011, as Chinese box-office receipts grow to a projected $5 billion from $1.5 billion. At the same time, China has been under pressure from the entertainment industry in the United States to ease censorship, open its markets and crack down on chronic film piracy.

“The awareness, and urge, and strong desire to protect” intellectual property has never been higher in China, Mr. Wu said. He and others, he said, have been lobbying the Chinese government for tougher antipiracy measures.

Regarding markets, Mr. Wu said he and fellow investors are eager to ease the way in China for blockbuster-style films from abroad — one of the biggest hits there lately has been “Mission: Impossible — Ghost Protocol” — by joining in substantial co-productions.

Asked whether the venture might back a company as large as the current incarnation of DreamWorks Studios, which was built around a $325 million stake from Reliance Entertainment of India but is now in search of new financing, Mr. Wu said, “Yes.” Harvest Seven Stars is being advised by the Creative Artists Agency, through its Beijing office. Several deals with film producers are being completed, Ms. Wright and Mr. Wu said. Given the agency’s involvement and the producer negotiations under way, the new venture appears to be pointed toward a Hollywood alliance sooner rather than later.

Mr. Wu, one of China’s wealthier entrepreneurs, and Ms. Yang, long a television talk show hostess, already control a media empire with television, print and online components. The new film-oriented fund is backed by their Sun Redrock Investment Group. Harvest is participating in the new venture through its Harvest Alternative Investment Group, which Ms. Wright leads. She described Harvest as the second-largest asset manager in mainland China.

The new venture will operate from Hong Kong and Beijing, Ms. Wright and Mr. Wu said.

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Asia Private Equity Weekly News, February 6, 2012

HONG KONG, February 6 (Reuters) – News and developments in Asia private equity from Reuters News for the Lunar New Year and week ending Feb. 3.
FEBRUARY 3
HONG KONG’S Hutchison 3G will buy Orange Austria from France Telecom SA and Mid-Europa Partners in a deal valued at 1.3 billion euros ($1.7 billion) including debt, expanding the corporate footprint of Asia’s richest man in Europe (Chicago Options: ^REURUSD – news) .
BLACKSTONE GROUP LP, the largest publicly listed alternative asset manager, reported lower fourth-quarter earnings as performance fees declined, but management fees increased from assets that grew to a record $137 billion.
FEBRUARY 2
ANALYSIS-It’s the year’s hottest initial public offering, but some wealth managers find themselves having a hard time recommending Facebook to their clients.
PRIVATE EQUITY firm TPG Capital LP has held initial discussions with a group of eight banks to fund a takeover bid for Australian underwear maker Pacific Brands Ltd, according to a source familiar with the matter.
THE U.S. private equity industry’s lobbying group said on Thursday that it has launched a campaign to tackle what it called a lack of understanding of the industry in the face of attacks on Republican presidential contender Mitt Romney.
CHINA INVESTMENT Corp (CIC) has acquired a minority stake in Washington-based asset manager EIG Global Energy Partners, the latest energy-related investment from China’s $410 billion sovereign wealth fund.
LOS ANGELES-based media and communications investment firm Saban Capital Group, which has Asia investments including Media Nusantara Citra PT and China’s Taomee Holdings Ltd , said it has opened a Hong Kong office led by Sumeet Jaisinghani.
FEBRUARY 1
CARLYLE GROUP and Warburg Pincus LLC took advantage of India’s recent market gains to pare stakes in two financial companies in deals worth $440 million, a sign of investor wariness about the sustainability of the rally.
CARYLE SOLD about 20 million shares of Housing Development Finance Corp Ltd in market deals on Wednesday, the chief executive of the Indian mortgage lender said, citing market sources.
WARBURG PINCUS sold about 17.5 million shares in India’s Kotak Mahindra Bank Ltd via stock market deals to raise about $170 million, three sources with direct knowledge of the matter said.
A UNIT (Berlin: UN7.BE – news) of the Swire group of companies, a Hong Kong conglomerate with interests ranging from properties to airlines, is among bidders for electronics and furniture retailer Courts Asia Ltd, two sources close to the matter said, an asset that could fetch close to $400 million.
UNITAS CAPITAL has acquired Carlyle’s stake in China restaurant chain Babela Group, said a source familiar with the matter, in a small deal but one that underscores the tough exit conditions for private equity investors.
BAIN CAPITAL and Unitas are among suitors to submit second-round bids to buy Prestolite Electric Inc from First Atlantic, two sources told Reuters, in a deal worth about $400 million.
INDIAN MICROFINANCE company Ujjivan Financial Services said on Wednesday that it has raised $25.5 million by diluting a minority holding in the company to private equity funds including Netherlands Development Finance Co, Wolfensohn Capital Partners and existing investors.
JANUARY 30
JAPAN (EUREX: FMJP.EX – news) ‘S ORIX Corp has dropped out of the race to buy software developer Yayoi, a source familiar with the matter told Reuters on Tuesday, which could be a blow to MBK Partners’ plan to sell the business. (Compiled by Stephen Aldred; Editing by Chris Lewis)

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2012年2月3日星期五

PRESS DIGEST – Financial Times – Feb 3

Financial Times
GLENCORE AND XSTRATA CLOSE TO MERGER DEAL
Glencore and Xstrata (Dusseldorf: XTR.DU – news) have launched merger talks to create a $88 billion commodities trading and mining giant with the financial muscle to sweep up some of its biggest rivals. http://www.ft.com/cms/s/0/a672e172-4d6c-11e1-b96c-00144feabdc0.html#axzz1ksWapJt6
BT SET TO LAUNCH ‘ULTRA-FAST’ INTERNET
“Ultra-fast” broadband using direct fibre-optic connections will become available to most British homes and businesses next year, after a significant technological breakthrough by BT , the UK telecoms group. http://www.ft.com/cms/s/0/f7cad70c-4da6-11e1-b96c-00144feabdc0.html#axzz1ksWapJt6
SNB STANDS FIRM ON SWISS FRANC CAP
The independence of the Swiss National Bank risks being compromised due to political pressure following the departure of Philipp Hildebrand as chairman, the central bank’s acting chairman has warned. http://www.ft.com/cms/s/0/4109d3c8-4dbb-11e1-b96c-00144feabdc0.html#axzz1ksWapJt6
DEUTSCHE BANK CONCERNED BY ECB LOANS
Deutsche Bank (Xetra: 514000 – news) has risked a clash with the European Central Bank by indicating it sees a stigma attached to the long-term help offered to banks to try to ease the euro zone’s funding crisis. http://www.ft.com/cms/s/0/ad4e2782-4cda-11e1-8b08-00144feabdc0.html#axzz1ksWapJt6
SPANISH BANKS TOLD TO FIND BILLIONS
Spanish banks must find 50 billion euros ($65.86 billion)from profits and capital this year to finance a clean-up of their balance sheets or agree to merge with another bank by May to gain an extra year’s grace, according to Spain’s economy minister Luis de Guindos. http://www.ft.com/cms/s/0/34a3a576-4dc7-11e1-a66e-00144feabdc0.html#axzz1ksWapJt6
RECESSION PREDICTED TO RETURN TO UK
The British economy will suffer a modest contraction this year, according to an influential academic institute that is the first to forecast a return to outright recession for the UK. http://www.ft.com/cms/s/0/a891b292-4dc3-11e1-b96c-00144feabdc0.html#axzz1ksWapJt6
CHINA’S STATE GRID TO TAKE 25 PERCENT IN REN
State Grid Corporation of China is to acquire 25 percent of Portugal’s national power grid in the second large-scale Portuguese acquisition by a Chinese energy group in six weeks. http://www.ft.com/cms/s/0/41a0c572-4dba-11e1-b96c-00144feabdc0.html#axzz1ksWapJt6
CHINA CONSIDERING DEEPER INVOLVEMENT IN EFSF
China is considering how to get “more deeply involved” in resolving Europe (Chicago Options: ^REURUSD – news) ‘s debt crisis by co-operating more closely with European rescue funds, Chinese premier Wen Jiabao said on Thursday. http://www.ft.com/cms/s/0/7b5870fa-4d63-11e1-b96c-00144feabdc0.html#axzz1ksWapJt6
($1 = 0.6321 British pounds) (Reporting by Stephen Mangan)
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2012年2月1日星期三

Growth-Stage Technology Investor WestSummit Capital Adds Two New Partners

PALO ALTO, Calif. & BEIJING–(BUSINESS WIRE)– WestSummit Capital, a private equity fund with a core focus on growth-stage technology companies that have a substantial presence or a strategic interest in China, announced venture capital and private equity specialist David Lam has joined the firm as managing director, and Elise Huang has been promoted to partner. With over $200 million under management, WestSummit Capital is focused on fostering business growth and technology innovation as well as job and value creation in the technology, Internet/new media, telecommunications and clean technology sectors.
Founded in 2010 by four former technology executives, Raymond Yang, Datong Chen, Jay Deng and John Yu, WestSummit Capital holds a distinctive position in the market as an investor with strong Chinese roots, decades of executive and operational experience in Silicon Valley and China, and thirty-plus years of combined technology investment experience at venture capital and private equity firms in the United States and in China.
The founding partners have worked together in different ways since the mid-1900’s, graduated within three years of each other from China’s prestigious Tsinghua University, and hold over 110 years of combined executive operating experience including three NASDAQ listings and one M&A transaction.
“WestSummit Capital is one of the first China-based funds to go global and our portfolio spans China, the United States and Europe,” said Raymond Yang, a co-founder partner and Managing Director of WestSummit Capital. “We believe 2012 is a breakout year for growth-stage companies interested in moving into the Chinese market. We view ourselves as a value-add, strategic partner with regard to China-value creation for the companies we invest in. That’s where we add tremendous insight.”
Yang added, “Many executives are still wary of doing business in China because they do not know where to start or how to navigate in China’s business culture. And conversely, Chinese-based companies feel the same way about expanding into the West.
“Everyone on the WestSummit team has deep industry relationships, solid credentials, and hands-on operational and investment experience in both the U.S. and in China. Our team knows first-hand the key role that transparency plays in creating lasting shareholder value, and understands what it takes to win in the global marketplace. David’s addition and Elise’s promotion reflect our ongoing commitment to extending our team’s capabilities, reach and experience.”
The team
The WestSummit Capital partnership includes:
Two new partners with extensive private equity, technology and international investment banking experience and extensive industry connections:
Investment Portfolio
WestSummit Capital has been quietly building its portfolio over the past two years. The firm has lead or participated in investment rounds in companies based in the U.S., Europe, and China. Investments include:

Accent, supplier of a System-on-a-Chip (SoC) platform for smart meters (Italy)
GigaDevice, provider of NOR flash memory (China)
Inside Secure, provider of technology solutions for contactless payment and near-field communications (NFC) (France)
SilkRoad Technologies, cloud-based human resource management software solutions (USA)
Tilera, developer of a multi-core processors for Cloud Computing environments (USA)
Unity Technologies, 3D gaming development software platform (USA)
VeriSilicon, provider of custom silicon solutions and SoC turnkey services (China)

About WestSummit Capital
WestSummit Capital is one of the first China-based technology growth-stage private equity firms in the industry. The firm invests in companies that have a substantial presence in or strategic interest in China and focuses on the technology, media, telecommunications and enabling clean tech sectors. WestSummit has offices in Beijing, China and Palo Alto, USA. More information can be found on the WestSummit Capital website at: www.westsummitcap.com
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Atego Secures Major, Multi-Million Dollar Equity Investment

SAN DIEGO, California and CHELTENHAM, England, February 1, 2012 /PRNewswire/ –
Raises further financing from pool of investors to finance expansion into China and further acquisitions
Atego(TM), the world leading software tools and professional services supplier, for complex, mission- and safety-critical systems and software engineering, announced today that it has secured an additional, multi-million dollar equity investment. Existing investor ETV Capital led the funding with participation from Albion Ventures, new investor ESO and individual investors. The funds will be used to finance the Atego´s current growth plan combining organic and external, acquisition-driven growth.
“Atego is a unique company with a strong portfolio of software products and professional services used daily by the largest global avionics, railways, automotive and defense companies. While the massive, $20 billion global embedded systems market is growing slowly, Atego has demonstrated a winning strategy allowing it to grow profitably and with this new investment the company is now well placed for further expansion.” said Neil Pitcher, CEO at ETV Capital. “With such growth rates, an experienced management team and a sterling list of customers, Atego offers a truly compelling investment opportunity in Software and Systems Engineering.”
Founded in December of 2009 through the merger of Artisan Software Tools and Aonix, Atego has since acquired three companies in Europe and the US, better serving its global customers and improving economies of scale.
The Company is also pleased to announce that as part of the fund raising, Richard Horsman joined the board as Independent Chairman. Richard is a software industry veteran having spent the last 9 years as CEO of Cybit Holdings Plc. and prior to this had senior management roles with Global Telematics Plc., The Baan Company, Manugustics and Dunn and Bradstreet Software (Geac). He is also currently a Non-Executive Director of Aim listed Plethora Solutions Holdings Plc. Richard Horsman said “I am delighted to join Atego at such an exciting time in the evolution of the business. As a result of our recent investment round, Atego is now well funded and ideally placed to exploit both organic and acquisitive growth opportunities. I am looking forward to working with the board as we further develop and deliver against our strategy.
“The continued support we receive from our investors shows strong support of our business plan. We continue to grow our core business profitably, both in existing geographies as well as markets in Asia Pacific, while integrating recent acquisitions such as HighRely Inc. and continuing to scan the market for further external growth opportunities, ” said Pierre Cesarini, CEO of Atego. “These funds will strengthen our balance sheet, finance our expansion in the fast-growing Chinese market and better place us to exploit acquisition opportunities should they present themselves in the future.”
About Atego
Atego is a world leading software tools and professional services company, focused on helping organizations engineer complex, mission- and safety-critical systems and software. With today´s systems and software engineering projects continually growing in complexity, Atego´s collaborative development
tools, robust runtime environments, certification know-how and supporting services enable abstraction, optimization and automation – dramatically increasing quality, security and productivity.
http://www.Atego.com
About ETV Capital
ETV is one of Europe´s leading providers of debt financing solutions for venture capital backed technology and healthcare businesses. Founded in 1999, ETV has a long and successful track record of investing in technology or intellectual property based companies across Europe and Israel, diversified by industry and development stage.
http://www.etvcapital.com
About Albion Ventures
Albion Ventures LLP is a leading independent venture capital investor, managing approximately $360 million across eight Venture Capital Trusts. Albion Ventures LLP is a partnership formed by the Close Ventures´ management team to acquire the business of Close Ventures Limited. http://www.albion-ventures.co.uk
All trademarks are recognized and are the property of their respective companies.

Media contacts:

Beverley McFarlaneTel: +44(0)1242-229-335Email: Beverley.McFarlane@Atego.com

Please send reader enquiries to:

Atego,  5930 Cornerstone Court West,  Suite 250,  San Diego,  CA 92121 USATel: 888-91-ATEGO (+1-888-912-8346)Email: info@Atego.com

Atego,  701,  Eagle Tower,  Montpellier Drive,  Cheltenham,  GL50 1TA,  UKTel: +44(0)1242-229-300Fax: +44(0)1242-229-301Email: info@Atego.com

This press release (PDF format) can be downloaded from http://www.atego.com/.
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2012年1月30日星期一

Car loans coast down low-rate lane during 2012

Asia Private Equity Weekly News, January 30, 2011

HONG KONG, Jan 30 (Reuters) – News and developments in
Asia private equity from Reuters News for Lunar New Year and the
week ending January 27.
JANUARY 27
INDIAN CONSUMER products maker Jyothy Laboratories
has raised 5.5 billion rupees ($110 million) through a 5-year
loan from Axis Bank to refinance part of the debt it
incurred to acquire a controlling stake in the Indian unit of
Henkel AG, Managing Director Ullas Kamath said.
SOUTH KOREAN regulators endorsed Hana Financial Group Inc’s
3.9 trillion won ($3.48 billion) acquisition of
Korea Exchange Bank, paving the way for U.S. private
equity firm Lone Star’s sale of the local lender and closing the
final chapter of a drawn out and acrimonious saga.
JANUARY 26
SHARES IN solar wafer maker Comtec Solar fell over
5 percent after the Shanghai-based company agreed to buy back
convertible bonds issued to TPG Capital, in a sign that
a glut in the industry is putting expansion plans on hold.
JANUARY 25
PT BANK Himpunan Saudara 1906, a small Indonesian
lender, plans to expand in Southeast Asia’s biggest economy by
bringing in a strategic investor through a rights issue next
year.
JANUARY 24
MOUNT KELLETT Capital Management has agreed to invest $225
million in Australia’s Lynas Corp through a convertible
bond, giving the rare earths miner a cheaper source of funding
to finish building its flagship plant in Malaysia, which is
awaiting a licence to open.
BC PARTNERS-owned health club operator Fitness First is set
to meet lenders to discuss a potentially looming covenant breach
as well as its debt maturities, Thomson Reuters LPC reported,
citing sources close to the company.
JANUARY 23
INDIA’S RED Fort Capital has raised $500 million for its
real estate private equity fund, aimed at tapping increasing
demand for housing and commercial spaces in Asia’s third largest
economy, its top official said.
JANUARY 20
BARING PRIVATE Equity Asia acquired 15 percent of Magic
Holdings, a unit of listed Huan Han Bio-Pharmaceutical Holdings
Ltd, for around HK$451 million ($58 million), Hua Han
said in a statement.
TPG and Singapore sovereign fund GIC will invest
around $115 million in China sportwear maker Li Ning Co Ltd
through a convertible bond, giving much needed capital
to a company whose stock fell more than 60 percent last year.
CARLYLE GROUP has sold 18 million shares in China
Pacific Insurance (Group) Co Ltd, taking its holding
below 5 percent, CPIC said.
PT ANCORA Indonesia Resources, a resources-focused
investment firm, aims to take advantage of the nation’s coal
boom by tripling its ammonium nitrate production, said the
firm’s chief executive.
ASIAN INVESTORS will account for over 20 percent of central
London office property deals this year, attracted by the British
capital’s safe-haven allure, transparency and high returns,
property consultancy Jones Lang LaSalle said.
JANUARY 19
JAPAN’S UNISON Capital cut the size of one of the largest
private equity funds in Japan by around a quarter to 107 billion
yen ($1.4 billion) in October due to limited opportunities for
new deals, two sources familiar with the matter said.
BLACKSTONE GROUP LP said that it is actively pursuing
further property investments in China, after a fund it controls
turned a profit on the sale of its stake in a real-estate joint
venture with Evergrande Real Estate Group Ltd.
INDIA’S KINGFISHER Airlines is in talks with Hong
Kong-based distressed debt firm SC Lowy Financial for a possible
investment, a sign the cash-strapped carrier may be running out
of more attractive traditional funding options.
JANUARY 18
OLYMPUS CAPITAL said it has invested 5 billion rupees (about
$98.7 million) for a significant minority stake in Indian
healthcare firm, DM Healthcare Pvt Ltd.
JANUARY 17
HEDGE FUNDS owning a large chunk of the $2.8 billion debt in
Australia’s Nine Entertainment, owned by buyout firm CVC
, have prepared a proposal to convert their debt into
equity in the TV network, a source told Reuters, in a plan that
would wipe out most of CVC’s equity.
NEW SILK Route Partners, an Asia-focused private equity
fund, said it picked a significant minority stake in educational
support services provider Varsity Education Management Pvt Ltd
for an undisclosed sum.
ANALYSIS-OLYMPUS Corp should be the easiest of
takeover targets: a profitable business with its share price in
tatters, its management in utter disgrace and its balance sheet
in need of fresh capital. But not in Japan.
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2012年1月23日星期一

Europe woes won’t stall trade finance in Asia

By V. Phani Kumar, MarketWatch
HONG KONG(MarketWatch) — Lessons from the global financial crisis and relatively stronger U.S. banks will likely protect Asian businesses from a repeat of the 2008 horror show, even as European debt troubles make trade loans more expensive and difficult to access.
A full-blown euro-zone crisis could still hit demand for Asian products and services harder than it has so far. But unlike the turmoil they faced in the aftermath of Lehman Brothers’ collapse, the region’s exporters are unlikely to suffocate this time around, gasping for credit like fish out of water, say bankers and analysts.
“The importance of trade finance to the global economy is better understood now than in 2008,” said Mark Williams, chief economist for Asia at Capital Economics. “One of the factors that contributed to the recovery in 2009 was the $250 billion of trade-finance guarantees announced by the [Group of 20 major economies]. In the event of a second global financial crisis, future guarantees are likely to be forthcoming.”

Asia’s Week Ahead: Central banks in focus

Asia’s spotlight is on monetary policy, including decisions from the Reserve Bank of India, the Bank of Japan and the Bank of Thailand. MarketWatch’s Rex Crum reports. (Photo: Getty Images)

Trade finance is often compared to the oil that greases the moving parts of a machine. A simple and frequently used form of trade finance is a letter of credit, which is provided by an importer’s bank to pay for goods shipped by an exporter. As the U.S. dollar is the currency of transaction in most cases, trade is affected whenever there is a scarcity of dollars.
According to Dealogic figures, several European banks have consistently ranked among the top 30 providers of trade finance in the Asia-Pacific region, excluding Japan, between 2007 and 2011.
BBVA S.A.

, which has a major presence in Spain and Latin American markets, was the largest provider of such loans in 4 of the last 5 years. BBVA lost the top spot to China Development Bank Corp. only in 2009, when mainland Chinese banks opened their lending taps to fashion a recovery from the financial crisis.
/quotes/zigman/254684/quotes/nls/bbva BBVA
+1.03%

European banks’ exposure to trade finance in Asia is disproportionately large to their overall loans in the region.
But Capital Economics’ Williams cited the latest data from Bank of International Settlements as showing that euro-zone banks account for only 2.3% of total credit in emerging Asia. That is meager compared to their 47.3% share of lending in emerging Europe and 17.1% in Latin America.
One consequence of the ongoing sovereign-debt crisis in Europe is that it has effectively shut out several major European banks from U.S. money markets. Many of the European lenders that have historically been the big providers of trade finance in Asia are now scaling back their dollar-loan books.

Increased funding costs

That is in turn forcing an increase in the interest rates banks charge on trade finance.

/conga/story/misc/international.html
140756

“The reality is spreads have gone up fairly significantly — almost to the 2008 peak levels — over the last six weeks. I think that, in general, there will be some tapering off, but the higher spreads are here to stay,” said Ravi Saxena, managing director and Asia trade head at Citibank

.
/quotes/zigman/5065548/quotes/nls/c C
+1.06%

Saxena said that in the past, exporters could easily convert a letter of credit into money on presentation at a bank. But a scarcity of dollars is making that more difficult.
Edward George, a London-based soft-commodities specialist at Africa-focused Ecobank, said the cost of trade finance has risen by as much as 5 percentage points in some cases over the past year.
“Short-term trade finance has been the worst affected, whereas project finance is mostly protected by long-term agreements,” said George.
The impact is being felt, even after the U.S. Federal Reserve agreed late last year to lower the interest rates on currency swaps with five other major central banks from around the world.
Under such swaps, the Fed provides dollar liquidity to its counterparts, including the European Central Bank and the Bank of Japan. Those central banks can then inject dollars into their respective jurisdictions, when required.
Read full story on the currency swaps.

Dollar hoarding

The situation is aggravated by hoarding of U.S. dollars, even when they are available.
“Demand for U.S. dollars remains high, but the supply has dried up, and many banks are hoarding U.S. dollars for their preferred clients,” said George.

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Volume: 634,167
Jan. 20, 2012 4:01p

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Volume: 55.97M
Jan. 20, 2012 4:00p
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EntreMed Secures $10 Million Financing

More Topics:
Posted January 23, 2012
ROCKVILLE, Md. — EntreMed, Inc. (Nasdaq: ENMD), a clinical-stage pharmaceutical company developing therapeutics for the treatment of cancer, announced today that it has secured $10 million in financing with strategic accredited investors, including IDG-Accel China Growth Fund II L.P., Emerging Technology Partners, LLC, and Dr. Tak W. Mak, Director of The Campbell Family Institute for Cancer Research.
The Company entered into purchase agreements with the investors, pursuant to which the Company has agreed to issue and sell to the investors convertible notes in the aggregate principal amount of $10 million. The investors also will be issued warrants covering a number of shares of common stock equal to 20% of the principal amount of the notes, divided by $1.15. The warrants are exercisable at $1.40 per share. The closing of the transaction is anticipated to occur on or about January 27, 2012 upon the satisfaction of certain conditions.
At the closing, IDG and ETP have the right to designate in the aggregate two members of the Company’s Board of Directors. In addition, it is expected that the Company will select an interim Chief Executive Officer.
Subject to the approval of the Company’s stockholders at the 2012 stockholder meeting, the notes will automatically and immediately convert into shares of common stock and the warrants will become exercisable. The notes have a maturity date of August 31, 2012, bear an interest rate of 6% and will convert at a conversion price of $1.15 per share. The conversion price reflects the 10-day average closing sale price ending on January 20, 2012. The notes are not convertible, and the warrants are not exercisable, prior to receiving stockholder approval. If stockholder approval is not obtained, the Company will be required to pay liquidated damages to the note purchasers equal to an aggregate of $1.2 million.
“We are very pleased to have the support from a group of knowledgeable investors and the validation of the potential of ENMD-2076. The proceeds from the notes will allow the Company to accelerate and expand its research and development activities, fund additional trials, initiatives and long term strategic plans,” said Michael M. Tarnow, the Company’s Executive Chairman.
After deducting transaction fees and expenses, the net proceeds to the Company will be approximately$9.3 million. The convertible notes, the warrants and the common stock into which the notes and warrants are convertible have not been registered under the Securities Act of 1933, as amended (the “Act”) and applicable state securities laws, but have been offered and sold in the United States pursuant to applicable exemptions from registration requirements under the Act and applicable state securities laws. This press release does not and shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.
About ENMD-2076
ENMD-2076 is an orally-active, Aurora A/angiogenic kinase inhibitor with a unique kinase selectivity profile and multiple mechanisms of action. ENMD-2076 has been shown to inhibit a distinct profile of angiogenic tyrosine kinase targets in addition to the Aurora A kinase. Aurora kinases are key regulators of mitosis (cell division), and are often over-expressed in human cancers. ENMD-2076 also targets the VEGFR, Flt-3 and FGFR3 kinases which have been shown to play important roles in the pathology of several cancers. ENMD-2076 has shown promising activity in Phase 1 clinical trials in solid tumor cancers, leukemia, and multiple myeloma. ENMD-2076 is currently in a Phase 2 trial for ovarian cancer, and preclinical and clinical activities are ongoing in assessing the compound’s applicability for other forms of cancer.
About EntreMed
EntreMed, Inc. is a clinical-stage pharmaceutical company committed to developing ENMD-2076, a selective angiogenic kinase inhibitor, for the treatment of cancer. ENMD-2076 is currently in a multi-center Phase 2 study in ovarian cancer and in several Phase 1 studies in solid tumors, multiple myeloma, and leukemia. Additional information about EntreMed is available on the Company’s web site at www.entremed.com and in various filings with the Securities and Exchange Commission (the SEC).
About IDG-Accel Fund
IDG-Accel Fund is a private equity investment fund focused on investment in various sectors and is managed by IDG Capital Partners, a leading investment management team in China with over 18-years of investment experience and industry knowledge.

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China Financing Slowdown Reduces Systemic Risk, Moody’s Says

January 23, 2012, 6:19 AM EST
By Bloomberg News
(Adds comments from report starting in third paragraph.)
Jan. 23 (Bloomberg) — China’s slowing non-bank financing growth will help the economy achieve a “soft landing” and reduces concerns about systemic risk, Moody’s Investors Service said in its Weekly Credit Outlook.
Preliminary data released last week from China’s central bank on financing in 2011 suggests an estimated drop in non-bank funding growth to 25 percent from 45 percent the previous year, Moody’s said. That is a credit positive for banks, the ratings company said.
“China’s ability to slow non-bank financing growth to its current pace is helpful to the prospects of a ‘soft landing’ in the economy and a development that diminishes our concerns about systemic risk,” Yvonne Zhang, a Beijing-based vice president and senior analyst for Moody’s, wrote in the report.
Chinese investors and borrowers have increasingly turned to non-bank products such as trusts, with investors seeking higher returns than bank deposits offer and borrowers looking for financing as China’s government slowed down new lending growth beginning in 2010. Ratings companies, including Moody’s and Fitch Ratings Ltd., said the rise in non-bank lending created added risks to the financial system in part because trusts often invest in assets tied to the real estate market or buy loans that banks want to move off of their balance sheets.
“Although these products are not on banks’ balance sheets, banks play an important role in making the transactions happen,” Zhang wrote.
Slowing Growth
Growth in China is slowing as the government seeks to curb inflation and rising home prices and refocus the engine of economic growth away from investment toward consumption. Gross domestic product expanded by 8.9 percent in the fourth quarter of 2011 from a year earlier, the slowest pace in more than two years. Foreign direct investment fell for the second straight month in December, with November’s decline the first since 2009.
Moody’s Zhang said at a Beijing conference in November that off-balance sheet risks at Chinese banks were rising fast and that the country’s lenders needed better management of credit and liquidity.
China’s aggregate financing, which includes bank lending, off balance-sheet loans and bond and stock sales, fell 1.11 trillion yuan ($175.1 billion) to 12.83 trillion yuan in 2011 from the previous year, the People’s Bank of China said in a Jan. 18 statement.
–Editors: John Brinsley, Patrick Harrington
To contact the reporters on this story: Benjamin Purvis in Sydney at bpurvis@bloomberg.net; Michael Forsythe in Beijing at mforsythe@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
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2012年1月19日星期四

Analysis – China has multiple choices to avoid hard landing risk

BEIJING (Reuters) – China faces what could be its worst year of growth in a decade with policy firepower that developed nations can only dream of.
A record-breaking tax take expected to top 10 trillion yuan ($1.6 trillion) in 2011 gives Beijing fiscal scope to support growth and financial system liquidity, while monetary policy is perfectly poised for easing after a near two-year tightening cycle.
Contrast that with deep deficits across Europe and the United States and the orthodox policies forced upon central banks on both continents in a desperate bid to avoid a slide into economic depression.
It adds up to China having every chance to steer its economy safely from its slowest quarter of growth in 2- years, and still avoid a hard landing that would reverberate globally.
“There are caveats, but compared to its counterparts, China has plenty of policy flexibility,” Tim Condon, head of Asian economic research at ING in Singapore, told Reuters.
The release of some 1.2 trillion yuan of fiscal deposits in December signals how roomy China’s policy pockets are.
That injection was the single biggest factor behind a jump in money supply and bank credit in December, according to analysts at China International Capital Corp, China’s biggest investment bank.
Chinese banks extended 640.5 billion yuan in new loans in December, up from 562.2 billion yuan in November, while M2 accelerated to 13.6 percent from November’s 12.7 percent.
CICC reckons the odds of a January cut in the ratio of deposits that commercial banks are required to hold as reserves (RRR) have been dramatically reduced as a consequence.
SYSTEMIC LIQUIDITY
The implications of China’s fiscal strength are crucial for money markets. An outflow of government deposits from the balance sheet of the People’s Bank of China (PBOC) can boost systemic liquidity far in excess of an RRR cut.
“It’s getting increasingly important as the size is getting bigger,” Xu Hong, an analyst with Daton Securities in northern Chinese city of Dalian told Reuters.
Government deposits fell 891 billion yuan in the last month of 2010, 954 billion yuan in December 2009, and 1,045 billion yuan in 2008, whereas a mere 350 billion yuan was estimated to have been injected into the system by the 50 basis point cut in RRR to 21 percent announced on Nov 30, 2011.
Economists polled recently by Reuters forecast a further 200 bps of RRR cuts to come in 2012, but the impact of that would far less than the 1.7 trillion yuan of injections implied if the government has turned an estimated 800 billion yuan surplus in 2011 into the 900 billion yuan deficit originally budgeted.
Released fiscal funds are a key factor underlying accommodative liquidity in the interbank market, according to Zhou Binglin, an analyst with Guosen Securities.
“That’s possibly why fund supply is not too tight despite capital outflows for two consecutive months and the absence of central bank liquidity injection,” he wrote in a client note.
China’s foreign exchange reserves, the world’s largest, fell $20.6 billion in the fourth quarter to $3.18 trillion as the trade surplus shrank and capital flows reversed.
That fall reinforced the views of many analysts and investors that a PBOC policy move was imminent, but a closer reading of fiscal deposit data would have been a better guide.
“It’s a key fact to pay attention to, particularly at the end of a year, and it’s role is becoming more visible,” a bond trader in the interbank market, who declined to be identified, said.
CHANGING DYNAMICS
China’s surging tax flows are also changing credit dynamics at the local government level, with regional banks being cajoled into providing loans to pet projects in return for the promise of a share of soaring fiscal deposits.
A notice on the website of the Rugao government in China’s eastern Jiangsu province said that the allocation of fiscal deposits would be linked to the credit offered by banks.
“Many small banks are in desperate need of deposits, and fiscal deposits are too big to miss, for which they have to make concessions,” a regional banker in Zhejiang province said.
Banks need the deposits because monetary policy settings were tightened so sharply over the last two years to fight the inflationary side-effects of massive stimulus that Beijing launched in 2008 to cushion the economy from the impact of the global economic crisis.
Twin bubbles in real estate and local government debt are still being battled by Beijing, and are arguably the only — if significant — policy constraint faced as the world’s second-biggest economy faces another economic slowdown.
It’s certainly a factor preventing the government using well-stocked fiscal coffers for outright economic pump-priming, or allowing explosive growth in still elevated leverage levels.
But relatively speaking, China has plenty of room to move.
“Every country has constraints. China was almost as unconstrained as it could have hoped for in 2008 when the crisis hit. The response to that has reduced the flexibility they have now, but they have far more than their counterparts in the West have,” ING’s Condon said.
(Editing by Kim Coghill)
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No FDI, no portfolio cash | Business Recorder

January 19, 2012
BR RESEARCH

By financing the current account deficit, transferring new technology and creating employment, foreign direct investment (FDI) can provide important macroeconomic benefits to the host country.
After somewhat calm journey, Foreign Direct Investment (FDI) has been going though a jittery phase since the end of 2008 when the financial crisis resulted in global recession.
Before the effects the global financial crisis could subside, the world entered another gloomy phase with European bloc nearing bankruptcy, MENA region falling apart and Iran-US relationship intensifying.
Such ambiance raises serious concerns about the tendency and ability of multinationals to continue their investing activities.
UNCTAD has also painted a very bleak picture, expecting a sharp decline global FDI.
This is not surprising given the euro crisis tipping the world into a recessionary pit.
This is a bad news for country like Pakistan that has its FDI falling rapidly since FY09.
To some extent the falling trend of FDI in Pakistan can be attributed to the global investment scenario.
Though China posted a 9.72 percent rise in FDI in CY11 to a record high of $116 billion, FDI has fallen for a second straight month in December by almost 13 percent.
However, amongst its regional peers, Pakistans position is apparently weaker, particularly due to due to domestic issues.
According to the World Investment Prospects 2011 by The Economist Intelligence Unit, Pakistan ranks the lowest in FDI inflows amongst China, India and Vietnam, based on the averages of 2007-2011 FDI, Inflows of FDI in Pakistan have dipped by 37 percent to $513 million during 6MFY12 from $840 million in 6MFY11.
The net foreign investment (foreign direct investment and portfolio investment) has contracted by 64 percent during the first half of FY12.
Portfolio investment witnessed a decline of 165 percent during 6MFY12 as investors shun the countrys main stock exchange due to rising incidents of violence.
The figures reveal a very depressing picture of approximately $1 billion of FDI for FY12, a decline of more than 80 percent of the highest from FY01-FY11.
The reasons are hidden from no one.
Lack of foreign investors interest as a result of ongoing energy crisis, adverse law and order situation and political uncertainty top the list.
Amongst the critical factors for FDI, Pakistan performs poorly in Macro economic stability, institutional efficiency, and security and worker education.
Indirect signals are being given out by the MNCs as they adopt the policy of remitting high dividends and repatriating profits.
A little better law and order situation at present can result in a tentative respite in FDI in Pakistan next year.
However, macro economic indicators still remain pretty weak for any recovery.
Amongst the regional peers, US is expected to remain the top destination for FDI.
China is to remain the biggest emerging market destination followed by India.
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China property, other data, add to slowdown worries

BEIJING (Reuters) – China’s course through the most testing economic conditions since the global financial crisis is getting bumpier, as data on Wednesday showed stuttering investment flows, tight credit and falling home prices coinciding with a difficult trade outlook.
The final rush of indicators ahead of the Lunar New Year holiday reinforced the view that economic growth will slowdown further in the first three months of 2012, a trend that gathered momentum at the end of 2011 and resulted in the slackest quarter of expansion in 2- years.
Pro-growth government policies applied so far should help avoid an outright hard landing, but the risk remains that the scale of the slowdown engineered domestically in the once-rocketing real estate sector and the size of the drop-off in external demand from debt-ridden Europe have been underestimated.
“Headline GDP growth shows a soft landing definitely, but if you look at some of the underlying sectors — particularly real estate investment — we see lots of vulnerabilities. It could be a pretty rough ride,” said Ren Xianfang, senior China analyst at IHS Global Insight in Beijing.
“By the final quarter of last year I think the government started to lose its grip on the pace of the slowdown and that’s largely because of the external shock,” she added.
That shock has come in the form of both slower exports growth — which ended December at roughly a third of the year-on-year level seen in January — and capital outflows, which ended the year with the first quarterly outflow since 1998, calculations by Nomura analysts show.
Still, while trade and capital flows including foreign direct investment might be sagging, they are doing so from record highs.
Even so, the Ministry of Commerce warned in a regular news conference on Wednesday that the near-term outlook was difficult and that only a modest growth in trade was anticipated in the first quarter.
REAL ESTATE SCRUTINY
A number of indicators this week showed China’s economic growth weakened in the fourth quarter, but it is the real estate sector that economists are scrutinising most carefully to assess the scale of the domestic slowdown.
With Europe in danger of slipping into a recession and U.S. growth looking lacklustre, China’s role in the global economy is magnified — particularly its ability to generate domestic demand that could absorb exports from struggling developed nations.
Real estate is the backbone of China’s domestic growth story. Property investment was worth 13 percent of total output in 2011 and it links some 40 major industrial sectors.
Data on Wednesday showed China’s new home prices fell for the third straight month in December and may drop further as Beijing sticks to its campaign to bring housing costs back to levels that the government considers reasonable.
That followed data on Tuesday showing annual growth in China’s real estate investment slowed in December to its weakest pace in a year.
“Today’s report is consistent with the unambiguously deteriorating trends seen in property sales, construction, starts, and investments. The data just turned from bad to worse,” Yao Wei, China economist at Societe Generale in Hong Kong wrote in a note to clients.
“The economy as a whole has not felt much chill yet, but H1 2012 is going to be difficult not just for property developers. Contraction in sales and sharp deceleration in investments will send shockwaves along the industry chain, which is expected to drag overall growth below the 8 percent mark in H1,” she said.
Intriguingly, tight monetary conditions revealed by the central bank’s total social financing aggregate — the measure it developed to offer a clearer picture of money supply than simple M2 — underline credit constraints in the real economy.
Total social financing fell to 12.8 trillion yuan (1 trillion pounds) in 2011 from 13.9 trillion in 2010, even as an estimated 350 billion yuan was injected into the financial system after November’s cut of 50 basis points to the ratio of deposits banks must hold as reserves.
BATTLE OF THE BUBBLE
China tightened policy to deflate the twin bubbles created in real estate and local government borrowing by the 4 trillion yuan stimulus package launched in 2008 to help the country through the global financial crisis.
The battle to bring those bubbles back under control is still being fought, even as the government faces another downturn that delivered a fourth successive quarter of slowing growth in October to December.
That battle is a key factor uniting economists in the view that even though China’s economy will decelerate further in the months ahead, a cut to policy lending rates by the People’s Bank of China is not on the cards.
“China started a deflating cycle last year and it will be very dangerous, very risky for them to end it prematurely because if they end it too early it will be an even larger macro economic risk for China going forward,” said Ren of IHS.
Up to 200 basis points of bank reserve cuts are expected in 2012 by analysts polled recently by Reuters, as that helps keep money supply growth stable in the face of capital outflows.
Beijing is likely to stick to what Premier Wen Jiabao has called “fine-tuning” of economic policy settings to counter the downturn for now, rather than adopting more aggressive measures such as a interest rate cuts.
That leaves the main area of uncertainty for economists the question of how sharp the slowdown in GDP growth will be in the first quarter of 2012. Many expect the next 12 months to be the most sluggish growth for China in a decade.
The most bearish call in the latest Reuters poll is Deutsche Bank’s 7.3 percent. That’s too steep for many and an unfathomable call to the likes of Ting Lu, Hong Kong-based China economist at Bank of America/Merrill Lynch.
A fall to there from 8.9 percent in the fourth quarter implies a decline wiping some 6 percentage points off growth at an annualised rate that would leave the economy expanding at barely 3 percent.
“That’s just not going to happen,” Lu said. “I think the chance of growth slowing to below 8 percent in the first quarter is very low. Calls below that are just too pessimistic. There’s a slowdown yes, but not that dramatic.”
(Additional reporting by Zhou Xin and Langi Chiang; Editing by Neil Fullick)
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2012年1月17日星期二

Caixin Online: China fund official:Barriers to investments abroad

By Gao Xiqing
BEIJING (
Caixin Online
) — Chinese overseas investment has grown from zero before reform and opening-up in the late 1970s into a behemoth today. It is projected that the total will reach $500 billion during the 12th Five-Year Plan, which covers 2011 through 2015.
Chinese companies are an emerging force on the stage of international investments. Due to the immensity of the country’s foreign exchange reserve and its fervent expansion of overseas investments, Chinese investors have had the world’s attention since the financial crisis of 2008.
While the movement has gone quite well so far, we still faced many challenges, some external and some internal.

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Every nation has laws and organizations to supervise foreign investments. There were two levels of challenges in the supervision realm that Chinese overseas investments faced.
The first was that the laws and regulations of some countries are particularly complicated. In those countries, it is easy to wander down the path of illegality if one stops paying attention for even a moment. The second was that some countries put up obstacles to Chinese investments via the legal or supervisory systems because of ideological or political concerns. Another major challenge for China’s new overseas investment drive is a lack of experience.
First and foremost, we lack an understanding of investment products. Many investment products abroad are either completely nonexistent at home or have just emerged, whether they are swaps, hedging or stock index futures. These products or vehicles have grown complex in developed markets. One must be especially competent in handling the technical aspects, for even the slightest misunderstanding could easily result in losses.

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We are probably most familiar with direct investments. However, in many countries and in many industries we have no precedent to follow. Our lack of experience exacts greater demands on us in risk management.
The next challenge is a lack of experience in project design, investment structures and negotiations. How can we identify good opportunities, develop projects or find suitable partners? How can we design an effective structure to manage investments, taxes and repatriation of investment income? How can we extract better terms and conditions from negotiations? These questions demand that we respond to the challenges carefully and study diligently. We must also make the utmost use of highly experienced talent — lawyers, accountants and other intermediaries.
Then comes a lack of understanding of foreign cultures and societies. Many investment activities cause cultural or societal friction in target countries. Some countries have developed complex feelings toward China as it has rapidly grown. Many people in those countries (not only supervisory organizations) look at China through culturally or ideologically colored glasses.
The world still hasn’t entirely adjusted to the reality of China’s rise, nor is our rise welcomed everywhere. We must be prepared to encounter some setbacks while we are investing abroad. In addition, the societies and governments of some investment target countries are especially complex. So we must research diligently and find top-notch consultants before investing. It is of the utmost importance that we maintain the stability and safety of investments, and that we avoid passively becoming entangled in local political, economic or social conflicts.
While Chinese investors are making great contributions to the growth and stability of the global economy, we must avoid certain immature attitudes. While it is true that Chinese corporations are becoming a force to be reckoned with in international investment markets, some of our investors put on arrogant attitudes — as though they believed that everybody ought to be seeking them. This attitude is not good for China’s image. It will also negatively affect the investors’ ability to attract opportunities, and in the long term it will harm development potential.
One big difference between Chinese overseas investment and that of developed Western nations is that we lack talent. The West has been involved in overseas investment for several hundred years, so their talent pool is vast. But Chinese efforts have only just begun. One could say that our first generation of investors has just emerged from the clay.
Our greatest challenge is to establish a mechanism to attract talents, retain them and allow talents to rise to their full potential. It’s not enough just to hire them; we must also be able to train them and build a reserve of talented individuals.
These are only a few of challenges facing China as a newbie in international investment. These are all just developmental problems, and we should have faith that we can resolve them. And despite these challenges, many new opportunities are appearing on the international market. For example, some high-quality assets have been devalued due to current market turmoil.
Also, some sellers’ urgent need for cash means we can negotiate stellar provisions and agreements that would be difficult to obtain under normal circumstances. As long as we analyze issues scientifically and approach them carefully, we can seize all opportunities and fulfill our fiduciary duty.
Read this commentary on Caixin Online.

The author is Vice Chairman and General Manager of China Investment Corp
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