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BIZCHINA / Index & Statistics
Record-high CPI triggers 4.5% plunge of China stocks
By Li Zengxin (chinadaily.com.cn)
Updated: 2007-09-11 16:47
Analysts said the August CPI statistics release triggered fears of
further tightening measures, but it was the accumulated pressures rather
than a single factor that had triggered today's deep plunge.
CPI, a barometer of inflation, rose 6.5 percent year-on-year in August
after a 5.6 percent increase the previous month, the National Bureau of
Statistics said Tuesday in a statement. The growth beats the six-percent
expectations most economists had voiced, and is well above the official
target of three percent for the whole year.
Meanwhile, the producer product index, a measurement of overall
inflation, increased 2.6 percent in August, 0.2 percentage points higher
than in July, the bureau said on Monday.
China is to issue 200 billion yuan (US$26.7 billion) of special treasury
bonds as the second batch of a planned 1.55 trillion yuan basket to
finance the country's new foreign exchange investment firm.
The bonds would be sold to the public, with outstanding terms of more
than 10 years, the Ministry of Finance announced on Monday. The first 100
billion yuan bonds will be issued later this month in three batches,
while sale of the second half is scheduled for the fourth quarter.
The announcement came two weeks after the ministry issued 600 billion
yuan of such bonds targeting the country's commercial banks with an
annual interest rate of 4.3 percent. "The bond sale will help ease
liquidity, prevent the economy from overheating and strengthen
macro-control policy," the ministry said.
"Theoretically, a 200-billion-yuan bond sale to the public could have the
same effect on excess liquidity as a 0.5-percentage-point hike in bank
reserve requirements," said Wang Guogang, a finance expert at the Chinese
Academy of Social Sciences. Issuing in batches and to different buyers
would ensure the stability of the financial market and reduce the bond
investment risks, Wang said.
The market itself will see a new round of listing waves in the coming
weeks. Bank of Beijing said yesterday it will raise as much as 15 billion
yuan (US$1.99 billion) in a Shanghai initial public offering (IPO). The
bank will sell 1.2 billion shares at 11.5 yuan to 12.5 yuan each, it said
in a statement to the Shanghai Stock Exchange.
China Construction Bank (CCB) released A-share issuance prospects and an
initial price inquiry announcement today. The China Securities Regulatory
Commission (CSRC) last Friday approved the yuan-denominated A-share
listing plan of CCB.
CCB will finish its price enquiry on September 11 to 13, launch offline
subscription on 14 to 17 and online subscription on September 17, making
the second-largest bank one of the "fastest" in issuing shares of the
returning red chips.
China Oilfield Service Limited (COSL), currently listed in Hong Kong, was
approved by CSRC for its A-share issuance yesterday. China's largest
marine oil service provider will issue no more than 820 million shares in
the domestic market, accounting for 17 percent of its enlarged capital
after the issue.
(For more biz stories, please visit Industry Updates)
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