Also in this week’s issue

News roundup

  • The People’s Bank of China kept the loan prime rate at 3.85%, leaving its benchmark rate unchanged for the ninth consecutive month. The next policy meeting will be on February 20. The yuan has gained nearly 10% against the dollar since last May.
  • Turnover on the Hong Kong stock market surpassed HK$300 billion ($38.5 billion), hitting an all-time daily high on Tuesday. Huge inflows continue to arrive from mainland China via the Stock Connect programme, with up to HK$185 billion already invested in Hong Kong shares so far this year, or 25% of the net purchases in 2020, Bloomberg reported.
  • The Hong Kong bourse is bracing for more megabuck listings from the Chinese internet sector too. Short video firm Kuaishou now has the green light to go public. The Tencent-back company is expected to raise at least $5 billion in a deal that could value the 10 year-old firm at $60 billion, Hong Kong Economic Times reports.
  • The share price of Alibaba in Hong Kong surged more than 10% on Wednesday following an appearance by its founder Jack Ma at an online event. The internet tycoon hadn’t been seen since the Chinese government triggered an antitrust crackdown in the internet sector in early November. Ma resurfaced (online, at least) at a ceremony for the Rural Teacher Initiative event, a charity event he established himself. “We’ll meet when the pandemic is over,” Ma told the online audience.
  • Only 6.3% of Chinese property firms rated by S&P comply with the central bank’s new restrictions on debt, the rating agency says. The so-called ‘three red line’ system, which imposes different borrowing limits on developers according to their financial situations, became effective this month. Some of the biggest property firms in the pool, including China Evergrande, have been tagged as ‘red’ and will be barred from raising more debt, Economic Information Daily also reported.
  • PPLive, a sports broadcaster owned by retail firm Suning, has launched a countersuit against the English Premier League over a TV rights deal that ended abruptly last year because of the Covid-19 pandemic. Suning also owns the Italian football club Inter Milan and Chinese Super League champions Jiangsu Suning. Both teams have struggled financially and reports have been rife that the Milan team could be put up for sale.
  • The State Council has issued a directive requiring local governments to get ready to conduct mass testing programmes, after a resurgence in confirmed Covid-19 cases. Cities with populations of more than five million should have the capacity to complete the testing of all residents within three to five days, the Chinese cabinet said, and compulsory testing should also be prepared for localities with fewer than five million people.
  • 7 years Jail sentence for corruption given to Qin Guangrong, Yunnan’s 70 year-old former Party boss between 2004 and 2013. Qin was said to be the first provincial-level chief to surrender voluntarily to China’s anti-graft body, having accepted gifts and bribes worth Rmb24 million ($3.7 million).
  • 3,131 Number of new tech start-ups founded in China last year, down 45% from a year ago, reports the Financial Times, citing that potential founders were staying put in secure jobs in times of economic uncertainty. Semiconductor, online education and healthcare start-ups were the most favoured among venture capital investors.
  • Rmb101 trillion China’s gross domestic product in 2020, crossing the 100-trillion-yuan mark for the first time. It is expected to be the only major economy to have recorded growth, logging an expansion of 6.5% for the fourth quarter and 2.3% for the year as a whole.
  • 17% Single day increase in China Evergrande’s stock price after it said it would repay a $2 billion bond early, easing investor concerns about its financial condition. The highly indebted property firm had promised last March to cut its borrowings by Rmb150 billion every year through 2022.

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