Business

China stocks slump to near five-year low, Moody’s changes outlook to negative

Published

6 months ago

December 5, 2023

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China stocks slump to near five-year low, Moody's changes outlook to negative

China’s blue-chip stocks slumped to nearly five-year lows on Tuesday amid worries about the country’s growth, with talks of a possible cut to China’s sovereign ratings by Moody’s denting sentiment during the session.

Foreign investors sold the most shares in one month and a half, while market participants cautiously awaited fresh economic indicators and policy meetings for more clues.

After the domestic market closed, ratings agency Moody’s announced an outlook cut on China’s government credit ratings to negative from stable.

The blue-chip CSI 300 Index slumped 1.9 per cent to close at the lowest level since February 2019, while Hong Kong’s Hang Seng Index also lost 1.9pc to a one-year trough.

The outlook change reflected the increased risks related to structurally and persistently lower medium-term economic growth and the ongoing downsizing of the property sector, Moody’s said.

The market’s weakness has fully reflected the risks in the economy and the reaction to the outlook change is overdone, said Xia Chun, chief economist of Forthright Holdings Co.

China’s Finance Ministry said it was disappointed by Moody’s downgrade, adding that the economy will maintain its rebound and positive trend. It added property and local government risks are controllable.

“Market confidence is still fragile” due to cyclical issues, said Minyue Liu, investment specialist, Asian Equities & Greater China Equities at BNP Paribas Asset Management.

A private-sector survey showed that China’s services activity expanded at a quicker pace in November. However, an official survey last week showed the sector unexpectedly contracted for the first time since December last year, prompting calls for more stimulus measures.

With the Shanghai Composite Index dropping below the key 3,000-point mark, BNP’s Liu said there could be some panic in the market.

China and broader emerging Asia market stocks were among the most net sold regions by global hedge funds in November, Goldman Sachs said.

Foreign investors sold a net 7.5 billion yuan ($1.05 billion) of Chinese shares on Tuesday, the biggest daily outflow since Oct 19.

Most sectors declined, with real estate developers, semiconductors and computers down between 2.9pc and 3.9pc. Hong Kong-listed tech giants slumped 2.1pc.

Market participants are awaiting more economic data later in the week and the upcoming Politburo meeting and the annual Central Economic Work Conference (CEWC), which usually discuss policy plans and the outlook for China.

UBS economists expect modest but explicit fiscal support to be announced during the CEWC.

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Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

2 days ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Business

Govt jacks up power price by Rs1.47 per unit

Published

2 days ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

2 days ago

May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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