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BEIJING, July 29 -- The securities watchdog is mulling further measures to plug the loopholes that showed up in the latest round of initial public offerings (IPO), according to Shang Fulin, chairman, China Securities Regulatory Commission (CSRC). The CSRC is generally satisfied with the results of the recent reforms, but also identified a number of areas that need to be improved. One of these areas is the lack of a provision to block institutional investors from taking advantage of the new allotment system by masquerading as personal investors in their IPO applications. "Some institutional investors were known to have circumvented the subscription limits on their accounts by making applications through personal investor accounts opened with borrowed ID cards," said Lu Junlong, analyst, China Finance Online. "Stockbrokers keen on earning commission fees usually turn a blind eye to such irregularities," he said. People watch the index screen at a stock market in Shanghai, China, July 1, 2009. The CSRC said it is planning to take steps to safeguard individual investors' interests. This has defeated, to some extent, the primary objective of the reform, of increasing the allotment of new shares to personal investors. In the past, the deluge of applications from well-financed institutional investors had largely crowded out applications from individual investors. Because of the loophole, the ratios of allocation of newly issued shares to personal investors in the past several IPOs were still deemed too low. For example, the ratio of allocation in the IPOs of Guilin Sanjin Pharmaceutical, one of the first companies to obtain a stock exchange listing after the lifting of the IPO suspension, was only 0.17 percent. The ratio of allocation in the Sichuan Expressway IPO was 0.26 percent, while it was 2.83 percent for China State Construction Engineering Corp's public float. "The ratio of allocation to subscription is at a low level, similar to the lottery system in the past," said Zhu Hongbin, an investor with over 10-year experience in the market. Considering the wide price gap between the primary and secondary markets, many institutional investors borrowed heavily from banks to subscribe for new shares. Easy credit and cheap money have given institutional investors a much greater edge over small investors in the fight for IPO allotments. "As long as the interbank seven-day repurchase rate stays below 3 to 4 percent, we can make profits by subscribing to new shares," a Shanghai-based fund manger said, who refused to be named. The investors' feverish penchant for newly listed stocks saw Sichuan Expressway Co soar 202 percent on debut. The bourse suspended trading in the scrip for two times to allow for a cooling off period on the first day. The company's issue price was 3.6 yuan, nearly 20 times the PE (price-to-earnings) ratio. After collective bidding, the opening price soared to 7.6 yuan and the shares finally closed at 10.9 yuan after touching a high of over 15 yuan. The high price was beyond the expectation of many analysts. According the reports from 23 securities firms, most analysts thought the reasonable price could be around 5 yuan. Guotai Junan Securities Co was the most optimistic, which estimated the shares could be worth around 7 yuan. The shares subsequently began to slump and closed at 9.81 yuan, with many individual investors burning their figures. According to the Shanghai Stock Exchange, individual investors were the main buyers for the new shares of Sichuan Expressway on its first trading day. Among the 74,000 accounts that bought shares on that date, about 99.9 percent was personal accounts. Institutional investors, including fund mangers, securities firms and insurance companies, did not join the speculation. According to CSRC Chairman Shang Fulin, the regulators are working on a plan to educate individual investors and also exploring effective mechanisms to protect investors' rights.
WASHINGTON, Aug. 1 (Xinhua) -- The G20 summit of world leaders in Pittsburgh this September should help promote the world economic recovery, said Chinese Vice Foreign Minister He Yafei recently. During the first coordinating meeting, which kicked off on Thursday, the participanting countries agreed that they should strengthen the coordination and cooperation to help the summit achieve positive and pragmatic outcomes. The Pittsburgh Summit should continue to promote all sides to strengthen the coordination of their macro economic policies and to boost the world economic recovery, said He during the two-day meeting. He also urged the upcoming summit to implement actively the outcomes of the G20 London Summit, to speed up the reforms of the international financial institutions, and to expand the representations of the emerging and developing countries. China hopes the summit will pay more attention to the development issue and to boost the world economy to achieve long-term and sustained growth by promoting common development, said He.
BEIJING, August 5 -- Property sales across 30 cities in China fell 4 percent in July as prices soared and supplies dwindled with big cities feeling the pinch for the first time this year, analysts said. According to the UWIN property transaction system, the floor space of apartments sold in July dipped 5.37 percent over June to 1.04 million sq m. Statistics put out by the Beijing Real Estate Transaction website showed that sales of forward delivery housing in Beijing fell to 10,862 units last month, compared to 12,840 units in June. Property transactions in Guangzhou fell 36 percent over June. The figure is only half of that of May, said Guangzhou's official property website. "The fall has been triggered by high property prices and shrinking supplies in some cities," said Qin Xiaomei, head of research, Jones Lang LaSalle Beijing. "Property developers have slowed down the pace of new projects in the second half after robust sales in the first half," she said. Property prices in China's 70 major cities were up 0.8 percent in June, the fourth month-on-month growth in a row this year, according to statistics from the National Development and Reform Commission. Beijing and Shanghai reported a month-on-month growth of 0.4 and 1 percentage points respectively in June, with prices skyrocketing to record highs of 2007 in some areas, fueled by strong investment, purchase demand and higher land prices. The high prices have also made most of the prospective buyers wary of making fresh investments. Li Wei, a 29-year-old company executive in Beijing, said he would prefer to adopt a wait-and-see attitude as the high prices have made most of his preferred apartments unaffordable. "The unit price of the apartment has soared to 20,000 yuan per sq m from 14,500 yuan per sq m 40 days ago," Li said. For others like Zhang Li, a property speculator from Wenzhou, Zhejiang province, this is the time to cash in. The apartment she bought in November last year has gained 40 percent in the past six months, largely exceeding her expectations. "I am a bit uneasy with such a rapid increase in such a short period of time," said Zhang, who has property investment experience of more than a decade. "With people's income and economic fundamentals seeing no big change, I think selling the property will be a safer bet." According to Grant Ji, director of Savills (Beijing), a UK-based real estate service provider, the fall in transaction volume is still within a normal band. "July was an off-season for the housing market," said Ji. "With no big shift likely in the macroeconomic policy during the second half, property prices are unlikely see a big fall as the market is still awash with funds," Ji said.
NANJING, Aug. 16 (Xinhua) -- Liu Yunshan, head of the Publicity Department of the Communist Party of China (CPC) Central Committee, has called on authorities at various levels to step up patriotic education in the run-up to celebrating the 60th anniversary of the founding of the People's Republic of China. Liu, also a member of the CPC Central Committee Political Bureau, made the remarks during a recent inspection tour in the eastern province of Jiangsu. Liu said patriotic education should serve the development and stability of China's reform, and should be included in the process of tackling the global financial crisis, and maintaining the country's steady and relatively fast economic development. He urged the authorities to incorporate patriotic education into the daily life of the Chinese people, to "turn their love for the country into concrete actions." Patriotic education should focus on China's youths and teenagers, Liu said, adding that the development of "red tourism", which mainly consists of visiting sites related to the history of the CPC and its armed forces, should also be highlighted.
URUMQI, Sept. 4 (Xinhua) -- A senior government official said Friday the situation in Urumqi, the capital city of northwest China's Xinjiang Uygur Autonomous Region, was under control after local residents had taken to the streets over two days to protest against hypodermic syringe attacks. There were no major protests in the city Friday, a day after massive protests that left five people dead Thursday, said Executive Deputy Mayor Zhang Hong. Deputy Mayor of Urumqi Zhang Hong speaks during a news conference in Urumqi, capital city of northwest China's Xinjiang Uygur Autonomous Region, Sept. 4, 2009. Zhang Hong said on Friday the situation was basically under control in the citySmall crowds gathered "in a few locations" Friday, but soon dispersed and nobody was killed, said Zhang. Syringe attacks carried out since Aug. 20 have resulted in panic and resentment from the public, the official said. Suspects were caught Wednesday when attacking members of the public. They were beaten by a angry crowd and one was seriously injured. People gather on a street in Urumqi, capital of northwest China's Xinjiang Uygur Autonomous Region, Sept. 4, 2009. Police were exerting efforts to control the situation in Urumqi on Friday. Five people have been confirmed dead and 14 others injured and hospitalized following Thursday's protests, Zhang said. Of the five dead, two had been confirmed as innocent civilians, while police are trying to identify the remaining three. He said investigations showed those carrying out the syringe attacks were from the Uygur ethnic group while the attacked included Han Chinese and other ethnic groups. Residents go around at a market on Meiqi Lane in Urumqi, capital city of northwest China's Xinjiang Uygur Autonomous Region, Sept. 4, 2009. By Thursday, local hospitals had dealt with 531 victims of hypodermic syringe stabbings, 106 of whom showed obvious signs of needle attacks. Zhang said the attacks were premeditated and organized to create terror in society. "The 'three forces' (separatism, terrorism and extremism) at home and abroad are not willing to see ethnic unity and their failure when the July 5 violence died down quickly," he said. "So they are using 'soft violence' to disrupt social order and instigate ethnic hatred." China's Public Security Minister Meng Jianzhu arrived in Urumqi Friday to direct work to defuse ongoing unrest in the city. Meng, also a State Councillor, urged local governments and Communist Party of China (CPC) committees at all levels in Xinjiang "to restore social order as soon as possible." "Maintaining stability is the central task of overriding importance in Xinjiang at the present time," he said in a meeting with local officials. Meng said the spate of syringe attacks, which were premeditated, masterminded and conducted by law-breakers and instigated by ethnic separatist forces, were a continuation of the July 5 riot in the city which left 197 people dead. He said the separatists' purpose was to undermine ethnic unity.