China markets round-up: Fiscal revenue declines, Supreme Court revises ceiling on private lending rate, US firm files class action against Baidu
GlobalCapital, is part of the Delinian Group, DELINIAN (GLOBALCAPITAL) LIMITED, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 15236213
Copyright © DELINIAN (GLOBALCAPITAL) LIMITED and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

China markets round-up: Fiscal revenue declines, Supreme Court revises ceiling on private lending rate, US firm files class action against Baidu

fraud_crime_575px_adobe_29Jun20

In this round-up, China’s fiscal revenues tumble 8.7% for the first seven months of 2020, the country’s top court slashes the legal limit on private lending rate, and an investor rights law firm files a class action claim against iQiyi’s owner Baidu.

China’s fiscal revenue between January and July dropped to Rmb11.47tr ($1.66tr), recording an 8.7% year-on-year decline, according to the Ministry of Finance (MoF). During the same period, expenditures decreased 3.2% to Rmb13.35tr.

*

The country’s non-financial outbound investment (ODI) for the first seven months of 2020 fell 2.1% year-on-year to Rmb423.65bn, data from the Ministry of Commerce showed.

*

The People’s Bank of China released the July data on financial markets.

New issuance in the domestic bond market last month stood at Rmb4.7tr, taking the total outstanding volume to Rmb109.4tr. The daily turnover in the interbank bond market was Rmb1.15tr, and in the exchange market Rmb88.6bn. The numbers represented a rise of 38.4% and 167%, respectively, compared to a year ago.

On the equities side, the daily trading volume on the Shanghai Stock Exchange grew by 100.7% to Rmb576.9bn, and that on the Shenzhen Stock Exchange by 67.8% to Rmb736bn.

*

China has assigned Rmb3.55tr of the Rmb3.75tr special purpose bonds quota for 2020 to local governments, said the MoF. The MoF has encouraged the local governments to complete their deals by the end of October.

*

The central bank kept the loan prime rate (LPR) stable for the fourth consecutive month in August. The one year LPR remained at 3.85% and the five year and above rate at 4.65%.

*

China cut its holdings of US Treasury bonds by $9.3bn to $1.07tr in June, according to data published by the Treasury Department on Monday. A reduction was also seen in March and April.

The biggest holder of US Treasuries, Japan, also lowered its investment for the third consecutive month, to $1.26tr in June.

*

The Rosen Law Firm, a US-based investor rights firm, said on Wednesday US time that it has filed a class action lawsuit on behalf of those who invested in securities of Baidu between April 8, 2016, and August 13 this year.

The class action suit was filed on the grounds that Baidu allegedly misrepresented the financial and business condition of iQiyi, that iQiyi allegedly had inadequate controls, and that as a result, Baidu’s public statements were materially false and/or misleading at all relevant times.

The lawsuit “seeks to recover damages for Baidu investors under the federal securities laws”, Rosen said on its website. 

Baidu and iQiyi did not respond to requests for comments.

*

In a Q&A session at the Hong Kong Exchanges and Clearing’s 2020 first half results media call, its chief executive Charles Li was reportedly asked about Ant Group’s upcoming IPO in Hong Kong and rumours that ByteDance is planning a similar move.

Li declined to comment specifically on the two companies. But he reportedly said that “almost all the reports you see will eventually come to list in Hong Kong” and that “it is only a matter of time”.

*

China’s National Development and Reform Commission has told six banks to provide credit support for the urbanisation of county-level cities.

Agricultural Bank of China, Agricultural Development Bank of China, China Construction Bank, China Development Bank, China Everbright Bank and Industrial and Commercial Bank of China will each arrange a yearly special quota for the cause. They have been asked to provide medium-to-long term loans at favourable rates.

*

The Supreme People's Court has officially lowered the ceiling for interest rates for private lending protected by law from 24% to no more than four times the one-year LPR, which will be 15.4% based on the current rate.

Separately, the Supreme Court also issued guidelines targeting frauds on Shenzhen Stock Exchange’s ChiNext board, promising to impose harsher punishments for companies and individuals that commit securities fraud.

*

AIA Life Insurance, the first wholly-foreign-owned life insurance company in the Mainland, has obtained its business licence and opened its doors in Shanghai. Its parent, AIA Group, won approval in June from the China Banking and Insurance Regulatory Commission to convert its Shanghai branch into a wholly-owned life insurance company.

Gift this article