From the category archives:

China

China Preliminary Feb-10 Car Sales +46% YoY

5 March 2010

China Feb-10 car sales were up 46% YoY to about 623,791 units according to China Auto Market. Car sales declined 33% MoM, which is weaker than 02 to 09 average Feb seasonality of -14% MoM growth. We believe weaker than seasonality MoM decline is driven by fewer working days in Feb-10 due to Chinese New Year and an unseasonally strong Jan-10 (i.e. Jan-10 sales was +13% MoM versus 02 to 09 average Jan seasonality of -8% MoM).

China: National People’s Congress Sets Modest Goals for the Year

5 March 2010

On Day 1 of the National People’s Congress, Premier Wen Jiabao reiterated the intention to maintain appropriately easy monetary policy and proactive fiscal policy. He also revealed major economic targets for this year: (i) Inflation target 3%, GDP growth target 8%; (ii) New lending target 7.5 trillion, M2 growth 17%; (iii) 9 million new urban jobs and 4.6% urban unemployment rate target; (iv) RMB policy stable; (v) Budget deficit of 850 billion, plus 200 billion bond issue on local gov behalf; and (vi) Investment growth target at 20% and property investment at 18%.

China: Sector Impacts of Policy Unwind

4 March 2010

China’s economic recovery was driven by two separate forces: The credit and investment stimulus. However, the PMI data reveal that the side effects of the stimulus continue to influence sector business conditions: (i) SOEs and large firms enjoy more favorable conditions than private and SMEs; (ii) Inland regions beat coastal areas and (iii) Investment related industries better than consumer and export industries. The effects of the lopsided stimulus program last year are unlikely to dissipate quickly.

China Insurance’s January Premium Growth: Off to a Good Start in 2010

4 March 2010

China Life and CPIC have released January 2010 life premium figures under the Old GAAP standards. China Life reported life premiums of Rmb41.8bn, up 14% yoy, and notably better than the 0% growth in FY09. CPIC reported life premiums of Rmb10.3bn, representing robust 47% yoy growth, also significantly better than the 2% growth in FY09. Meanwhile, both CPIC and Ping An have released life premium figures under New GAAP for January 2010. CPIC reported Rmb8.9bn (up 27% yoy) and Ping An Rmb21.6bn (up 58% yoy). The good life premium growth in January 2010 affirms our view of continued good NBV growth for 2010. We expect life premium growth to accelerate in 2010, off a low base in 2009 as we move into the second year of sector-wide business mix restructuring.

China: What to Expect from the NPC Meeting?

3 March 2010

The annual NPC meeting will likely maintain the vague policy language; Policy continuity implies that the Rmb4 tn plan will be carried out this year; Policy exit will likely be gradual and sector-based; Surprises could occur in structural reforms but the chance is still limited. Market implications – China’s investment-driven growth model may last for a few more years before its potential is exhausted. Recent policy normalization is a negative in the near-term but positive in longer term. Further policy shocks are likely limited before inflation rises to a substantial level.

China PMI Moderates Further Under Tightening

1 March 2010

China’s PMI had the largest decline since Nov 2008, led by production and new orders, both down by 6.2 pts from a month ago. Export orders also dropped by 2.9 pts. The weakness of PMI might have exaggerated the downward pressure of the Chinese economy, and some rebounds are likely in coming months. But domestic policies, particularly credit control, could have weighed on domestic demand.

HK/China Property and Conglomerate News (22 Feb 2010)

22 February 2010

Auction on Tseung Kwan O land site today; 900 units sold in YOHO Midtown at HK$5,500psf; China’s new credit rules put brakes on banks’ lending binge; Shrinkage in transaction volume in China’s market during Spring Festival; China’s retail sales up 17% during Spring Festival; Centaline Centa-City Leading Index up 0.47%; Country Garden recorded RMB1bn sales in the CNY holiday; Raising retail rentals in HK; Depressed transaction volumes in HK secondary market.

HK/China Banks Daily News Highlights (22 Feb 2010)

22 February 2010

China tightens personal and capital loans rules; China Forex Regulator: Fund Inflows Will Rise In 2010; Job data positive, but no time for complacency; CMB trusted asset reached Rmb208.1bn by the end of 2009; BoCom is said to raise US$4bn from Shanghai and HK stock bourse; Shanghai Pudong Development Bank is said to list in HK stock bourse; HKMA reiterated prudent mortgage pricing policy; ICBC plans Rmb16.5bn for fixed asset investment.

China Macro/Industry News (22 Feb 2010)

22 February 2010

CBRC orders banks to tighten rules on personal and corporate loans; January inward FDI up 7.79%; 6th straight monthly rise; Spring Festival retail sales reached Rmb340bn; Daily power generation up 30% YOY during Spring Festival; Natural gas output up 7.7% in 2009; China’s FOREX reserves account for 30% of world total; January railway FAI up 70%+ YOY; Passenger volume increased 19.4% YOY during Spring Fest Golden week; China gives all-clear to trading in stock futures; CSA to form JV with KLM; Country Garden Lunar sales amounted to Rmb1bn; Lenovo parent group said to buy BOCI stake.

Asian Currency: Monetary Tightening to Lead to Asian Currency Strengthening and Japanese Equity Gains

21 February 2010

Global equities climbed 70.7% from the March 2009 low to the January 2010 high; Japanese equities increased 41.4% over the same period; We believe there is concern that monetary tightening in China will have a knock-on effect on global equities; Stocks rise with Chinese rates and the renminbi; Japanese stocks rise when Chinese rates rise; Asian currencies set for real gains.

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