Business news with words billion+capital+commission. 21 news.

CHINA'S military enterprises are encouraged to conduct group listings and are expected to raise between 50 billion yuan (US$6.75 billion) and 60 billion yuan from public share sales by the end of 2010, a senior official said. The majority of these enterprises will complete their reform to turn into shareholding companies in five years, which paves the way to trade shares publicly, said Wu Fenglai, head of the Reform Department under China's Commission of Science Technology and Industry for National Defense. In his article published yesterday in the China Securities Journal, Wu noted that military enterprises, except wholly state-owned ones, welcome foreign investment. Depending on their influence in national security, the country's military enterprises are divided into wholly state-owned, state-controlled and state-invested. "Most of China's military enterprises are allowed to source funds from the capital market and foreign investors," said Wu. China issued a new

NANYANG Commercial Bank plans to at least double its network on the Chinese mainland in two years, after it opened its local incorporation yesterday to fully tap the mainland market. The bank said in Shanghai yesterday it would offer unlimited yuan services. The Hong Kong-based bank gained the approval to set up the local incorporation with a registered capital of 2.5 billion yuan (US$341 million) from the China Banking Regulatory Commission on December 4. The local incorporation was set up on December 14. Nanyang Commercial Bank has six branches and one sub-branch on the Chinese mainland in cities of Shanghai, Beijing, Shenzhen, Guangzhou, Dalian and Haikou. "Network expansion is a key part of the local incorporation's business development," a bank spokesman said. He said the bank would first focus on major cities in the Pearl River Delta, Yangtze River Delta and coastal areas in the geographic expansion. It will also seek opportunities to open outlets in

NANYANG Commercial Bank plans to at least double its network on the Chinese mainland in two years after it opened its local incorporation today. Nanyang Commercial Bank (China) Ltd opened in Shanghai yesterday to offer unlimited yuan services to Chinese. The Hong Kong-based bank gained approval to set up the local incorporation with a registered capital of 2.5 billion yuan (US$341 million) from the China Banking Regulatory Commission on December 4. Nanyang Commercial Bank has six branches and one sub-branch on the Chinese mainland in Beijing, Shenzhen, Guangzhou, Dalian, Haikou and Shanghai. "Network expansion is a key part of the local incorporation's business development," the bank said. The bank will first focus on major cities in the Pearl River Delta, Yangtze River Delta and the coastal area. It will also seek other opportunities in other areas. The bank will focus on personal financial planning products and services in retail banking. In corporate banking,

CHINA'S proposed sale of the latest batch of special treasury bonds next week won't largely affect short-term liquidity or dampen stock-market performance, industry analysts said yesterday. The Ministry of Finance said it will sell 750 billion yuan (US$100 billion) of 15-year special treasury bonds to the central bank via the Agricultural Bank of China next Tuesday to raise capital for its state investment fund. Analysts said the central bank may gradually use the special bonds as collateral for repurchase deals with commercial banks to soak up excess liquidity. The sale may help the Agricultural Bank of China earn commission fees to prepare it for an initial public offering next year, they said. This batch of special treasury bonds, to be sold to institutional investors on the interbank market at a coupon rate of 4.45 percent, is part of the ministry's plan to issue 1.55 trillion yuan of special debt this year. In August, China announced the sale of 600 billion yuan in

CHINA Securities Regulatory Commission yesterday approved the A share initial public offering plan of China Pacific Insurance (Group) Co Ltd. The company will issue one billion A shares on the Shanghai Stock Exchange, making it the third insurer listed on the Chinese mainland after its larger rivals China Life and Ping An Insurance. The A shares will account for 12.99 percent of China Pacific's expanded share capital and the money raised through the domestic listing will be used to replenish capital to help expand business, its prospectus said. Analysts estimated the shares would be sold at 20 yuan apiece and start trading on the Shanghai Stock Exchange before the year-end. The diluted earnings per A share are estimated at 0.84 yuan, as the company anticipates a net profit of 6.45 billion yuan this year.

INDUSTRIAL and Commercial Bank of China today in Tianjin opened the country's first leasing firm wholly owned by a domestic bank. ICBC Financial Leasing Ltd, registered in Binhai District in Tianjin with a capital of two billion yuan (US$271 million), will offer aircraft and ship financing services, said Yang Kaisheng, director of the country's biggest lender. The bank signed cooperation agreements with China National Aviation Holding Company, COSCO Group, Hainan Airlines and a Canadian company at the opening ceremony. The commission has also given approval to Minsheng Bank, China Merchants Bank, Bank of Communications and China Construction Bank to enter the leasing business. The leasing business may help reduce strong demand for ships and planes as the country's economy continues to grow quickly. Over the past 10 years, China's demand for planes has doubled while about 90 percent of the financing for plane leases on the mainland are provided by foreign companies. The

GUOHUA Life Insurance opened in Shanghai today to tap the country's rising need for financial protection. The Shanghai-based life insurer has registered capital of 300 million yuan (US$40.5 million). The insurer got the go-ahead from the China Insurance Regulatory Commission to start business in October. Hubei Biocause Pharmaceutical Co, a Shenzhen-listed drug maker, holds a 19.99 percent stake in Guohua Life as its biggest shareholder. Biocause invested 59.97 million yuan in the life insurer. Shanghai is gearing up to be an international financial hub and is already home to big name financial players from the banking, insurance and securities sectors. Life insurance premiums topped 29.27 billion yuan in the first ten months in Shanghai, up 16 percent from a year ago. At the end of October, there were 33 life insurance companies in Shanghai.

CHINA'S city-level commercial banks recorded an average non-performing loan (NPL) ratio at four percent for this year, down from the 15.26 percent level at the end of 2003, according to Jiang Dingzhi, deputy head of the China Banking Regulatory Commission. Jiang said smaller commercial banks nationwide, including rural cooperative banking institutions, are developing in a healthier way, with their capital adequacy and assets quality improved substantially. City commercial banks had their average capital adequacy ratio raised to 8.6 percent this year, up from -1.6 percent at the end of 2003. Rural cooperative banking institutions reported 183.1 billion yuan (US$24.74 billion) in combined net assets, and their capital adequacy ratio averaged 9.1 percent, as against the -6.8 percent four years ago. They had made losses for 10 consecutive years but reversed the situation last year, when they garnered 18.6 billion yuan in net profits, compared with 550 million yuan of losses in

H&R Block Inc, the biggest US tax preparer, received US$350 million of extra funding for its money-losing mortgage unit from Greenwich Capital Financial Products Inc. The agreement boosts credit available for Option One Mortgage Corp to US$750 million, Missouri-based H&R Block said in a filing with the US Securities and Exchange Commission. The accord lasts through October 1. H&R Block has been allowing some Option One credit lines to expire, saying they weren't needed as demand for subprime home loans waned. Chairman and Chief Executive Officer Mark Ernst quit last week after US$1 billion of losses on mortgages. Richard Breeden, the new chairman, won a seat on the board in September through a proxy fight after urging Ernst to "stop the bleeding." Ernst was the latest CEO to resign because of losses caused by subprime mortgages, or loans given to people with the weakest credit and highest risk of default. Citigroup Inc and Merrill Lynch & Co ousted their CEOs

TWELVE enterprises black listed due to the emission of heavy pollution will be cut off loans from all banks, as part of the act to promote "green credit loans", the China Youth Daily reported today. The State Environmental Protection Administration has delivered the black list to the China Banking Regulatory Commission and the People's Bank of China, but do not reveal the 12 company names. "The method is aimed at forcing heavy polluters to be responsible for the economic losses (they cause)," said an official with the authority. The top fine for polluting is only 100,000 yuan (US$13,459), so environmental authorities implemented the loan ban to force more companies to follow the law. A brewery in Anhui Province saw its 10 billion yuan credit line suspended as it had no facilities to treat waste-water discharge for years. A power company in Chengdu, capital of Sichuan Province, had its loans from an outlet of China Merchant Bank recalled after it failed

VISA Inc. hopes to cash in on its massive credit and debit card network by raising up to US$10 billion in what would be the second largest initial public offering of stock in US history. The San Francisco-based company disclosed its target amount late yesterday in documents it filed with the Securities and Exchange Commission, a significant step in a hotly anticipated IPO expected to take place early next year. Visa did not specify how much stock would be sold or at what price per share. A proposed ticker symbol was not listed either. All that information will emerge in future filings leading up to the IPO. If Visa realizes its US$10 billion goal, it would be raising the second most ever generated in an IPO by a US company, according to data maintained by the research firm Renaissance Capital. AT&T Wireless Group raised US$10.6 billion in an IPO completed in April 2000 near the height of the dot-com boom. MasterCard Inc., Visa's next largest rival, went public 18 months

CHINA'S listed state-owned enterprises should play a key role to guarantee a well-developed capital market and combat securities crime, China's stock watchdog said yesterday. "Listed SOEs should be pillars of China's capital market. They must be independent, disciplined and competitive, serving as role models for other publicly trade companies," said the Website statement, citing Fan Fuchun, deputy chairman of China Securities Regulatory Commission. By October, a total of 279 companies controlled by state-owned enterprises had been listed on the market. Their combined value of assets reached 4.01 trillion yuan (US$534.6 billion) with net earnings of 273 billion yuan in the first ten months. The listed SOEs have collected a total of 570 billion yuan from trading their shares on the market. Fan stressed that listed companies should be responsible for the interests of all shareholders, instead of only the biggest shareholder. Companies should safeguard their

THE Shanghai International Group Co has become wholly state-owned, paving the way for consolidation of its holdings in financial companies. Its five government-affiliated shareholders gave their stakes to the city's State-owned Assets Supervision and Administration Commission, the Shanghai Pudong Development Bank said in a statement to the Shanghai Stock Exchange yesterday. Shanghai International, which owns 33.9 percent of the bank, is the largest shareholder in Pudong Bank. The bank is the only publicly traded company in the group and Citigroup Inc has a small stake. Pudong Bank and Shanghai International share the same chairman, Ji Xiaohui. The Shanghai government boosted the capital of Shanghai International to 10.58 billion yuan (US$1.42 billion), the statement said. Qiu Zhicheng, a Haitong Securities Co analyst, said the move is to centralize the stake structure of Shanghai International, which was set up in 2000. The move itself is neutral to Pudong Bank, Qiu said.

GIANT Interactive Group Inc, developer of China's most popular online game last year, and a shareholder may raise US$801 million in the largest US initial public offering by a Chinese company since at least 1999. The Shanghai-based company and the daughter of its chief executive officer will sell almost 57.2 million American depositary receipts, equivalent to a 22-percent stake, at US$12 to US$14 each, according to a document posted yesterday on the Website of the US Securities and Exchange Commission. Giant Interactive is raising funds to finance capital expenditure and potential acquisitions. Sales of online games in China may more than triple to US$3 billion in 2011, from last year's US$815 million, according to a forecast by International Data Corp, a market research firm. Chinese companies have raised US$3.3 billion in US IPOs so far this year, more than the last two years combined, according to data compiled by Bloomberg News. Nasdaq-quoted ADRs of Perfect World Co, a

CHINA has allocated 80 billion yuan (US$10.5 billion) within the next five years to prop up improvements and innovations of high-tech enterprises, the National Development and Reform Commission said. Under a memorandum of understanding signed by the China Development Bank and NDRC, the fund will be used in high-tech modernization, key projects and the development of small and medium-sized high-tech firms, the commission said in a statement posted on its Website. The project aims to formulate efficient finance channels for the high-tech industry at China Hi-Tech Fair being held in Shenzhen. "The government has noticed the problem and planned to reorganize the listing and other finance systems to support promising high-tech firms," Zhang Xiaoqiang, vice director of NDRC, said during a press conference last week. NDRC, CDB and the Shenzhen Stock Exchange are working together in order to promote teamwork between high-tech ventures and the capital market. They aim to

CHINA'S securities watchdog hasn't approved any new A-share investment fund in more than a month in an apparent attempt to ease the stock markets' abundant liquidity, industry sources said yesterday. But the regulator may resume vetting applications as early as this week as large equity sales on the Chinese mainland bourses should soak up capital, the sources said. "We've seen a hiatus since early September as worries were mounting about overheating and excess liquidity," said a Shanghai-based fund source familiar with the situation. "We applied for a new equity fund three months ago and were not given a clear timetable for its launch." Officials at the China Securities Regulatory Commission were not available for comment yesterday. The stock authority last month slowed the pace of approving new domestic funds after allowing six fund managers to pool more than 50 billion yuan (US$6.67 billion) in client capital in August. The last new mainland A-share fund was launched by China Asset Management on September 5. The benchmark Shanghai Composite Index has risen 27 percent since the start of August as blue chips were snapped up over rosy prospects for earnings growth. The index has jumped more than 110 percent this year on top of a 130 percent gain in 2006. "Regulators also want to use the period to encourage capital outflows to help reduce pressure on the country's bulging foreign-exchange reserves," said a Shenzhen-based fund executive. "We are now on track to launch products in that area." China's financial regulators have given licenses to six domestic fund managers to start helping customers invest in overseas securities in the past two months under the Qualified Domestic Institutional Investor program. China Southern Fund Management and China Asset Management each raised US$4 billion last month through their pilot QDII products, while Harvest Fund Management will start the sale of an overseas-invested equity fund this week. The sources noted that the stocks watchdog will likely resume reviewing proposals for new A-share fund sales this month as capital is set to tighten up as a result of large initial public offerings. China Shenhua Energy Co raised 66.6 billion yuan late last month in Shanghai in the world's biggest stock sale so far this year. The country's top coal miner's shares start trading today. "As more Hong Kong-listed firms and domestic companies are likely to conduct IPO

SOHO China Ltd, the largest developer in central Beijing, rose yesterday after starting trade in Hong Kong on its initial public offering. The company's stock rose 17 percent to HK$9.74 at the noon break in Hong Kong after climbing as much as 23 percent earlier. Soho China raised HK$12.9 billion (US$1.7 billion) in its initial share sale. Individual investors ordered HK$220 billion worth, or 169 times the shares set aside for them, the company said. "I won't expect them to gain too much from the IPO price," said Francis Lun, general manager at Hong Kong-based Fulbright Securities Ltd. "Compared with competitors, their land bank isn't as attractive. The oversubscription probably reflected the amount of excessive liquidity in the market more than anything." Sino-Ocean Land, the city's largest builder by area sold, surged 43 percent on its September 28 Hong Kong trading debut, according to Bloomberg News. Share sales provide an alternate source of funding after China raised interest rates to a nine-year high on September 14, seeking to damp speculation in property and equities. Soho is one of two Beijing builders debuting in Hong Kong this month, the other being China Aoyuan Property Group Ltd. Land prices in 70 Chinese cities surged 13.5 percent in the second quarter, according to the National Development and Reform Commission. Property price increases reached a two-year high of 8.2 percent in August, the state planner said. Soho China and stockholders have sold a combined 1.55 billion shares, a 31-percent stake, at HK$8.30 each. The price, set at the top end of the range, helped rank the share sale as the third-largest Hong Kong property IPO since the beginning of 1999, when Bloomberg began to track such data. The developer in 2003 called off its first attempt to go public, when it sought to raise US$250 million in the United States. That offer faltered when banks helping sell the stock disagreed on the profit outlook, bankers involved said at the time. Soho China, founded by Pan Shiyi and his wife, former Goldman Sachs analyst Marita Zhang Xin, has built 1.2 million square meters of properties, according to a sale document distributed to investors before the share sale. It's raising capital to finance construction, acquisitions and repay debt. It has built or is building six Soho-branded developments in the Beijing and also built the Commune by the Great Wall boutique hotel.

CHINA'S securities watchdog has halted approving sales of new A-share funds for more than a month in an apparent attempt to ease growth of already abundant stock-market liquidity, industry sources said today. But the regulator may resume vetting applications to kick off new funds to invest in yuan-backed A stocks as early as this week as big-sized equity sales on the mainland have been working to soak up capital, according to the sources. ``We've seen a hiatus since early September as worries were mounting about overheating and excess liquidity,'' said a Shanghai-based fund source familiar with the situation. ``We applied for a new equity fund three months ago and were not given a clear timetable for its launch.'' The stock authority last month slowed the pace of approving new domestic funds after allowing six fund managers to pool more than 50 billion yuan (US$6.67 billion) of client capital in August. The last mainland A-share fund was launched by China Asset Management on September 5. Officials at the China Securities Regulatory Commission were not available to comment today. The benchmark Shanghai Composite Index has risen by about 27 percent since the start of August as blue chips were snapped up on rosy earnings growth prospects. The index has jumped more than 110 percent this year on top of a 130 percent gain in 2006. ``Regulators also want to use the period to encourage capital outflows to help reduce pressures on the country's bulging foreign-exchange reserves,'' said a Shenzhen-based fund executive. ``We are now on track to launch products on that aspect.'' Chinese financial regulators have given licenses to six domestic fund managers to start helping customers invest in overseas securities in the past two months under the Qualified Domestic Institutional Investor scheme. China Southern Fund Management and China Asset Management last month each raised US$4 billion for their pilot QDII products while Harvest Fund Management will start the sale of an overseas-invested equity fund this week. The sources noted, however, that the stock watchdog will likely resume reviewing proposals for new A-share fund sales this month as capital is set to be tight amid large initial public offerings. China Shenhua Energy Co raised 66.6 billion yuan late last month in Shanghai in the world's biggest stock sale so far this year. The country's top coal miner's shares will start trading tomorrow. ``As more Hong Kong-listed firms and domestic com

CHINA Investment Corporate Ltd, the country's long-awaited state forex investment company set up to make better use of its huge foreign exchange reserve, was inaugurated today. The CIC, with a registered capital of US$200 billion, is a solely state-owned company, according to the company sources. Lou Jiwei, current deputy secretary-general of the State Council, was appointed the CIC's board chairman, while Gao Xiqing, now vice chairman of the National Council for Social Security Fund,was designated the general manager, the sources said. Hu Huaibang, Commissioner of Discipline Inspection with the China Banking Regulatory Commission, took the post as chief supervisor, said the sources. The company, to be operated in a completely commercial way despite its governmental backup, will mainly pursue combined investment in overseas financial markets. "It will deal with its forex investment business independently by persisting in the principle of separating government functions from company management," the sources said. The company will try to maximize the proceeds via long-term investments within a range of acceptable risks, said the sources.

IKB Deutsche Industriebank AG, the German lender that had to be bailed out by KfW Group over subprime losses, said yesterday that fiscal first-quarter profit tumbled after the bank wrote down the value of financial assets. Net income in the three months to June 30 fell 67 percent to 11.7 million euros (US$16.6 million) from 35.1 million euros a year earlier, the Dusseldorf-based bank said yesterday, after postponing the release by six weeks. "The impact of the current crisis is only reflected to a limited extent in the figures for the first quarter," the bank said. The figures assume the previous fiscal year's report is "free of material errors." Results from a PricewaterhouseCoopers special audit are due in October, according to Bloomberg News. IKB warned earlier this month that this year's loss could be as much as 700 million euros and said future earnings will be "significantly lower" than previous years as it curtails investments that brought it close to default. "First-quarter figures carry little significance," said Andreas Weese, a Munich-based analyst at UniCredit SpA, who has a "sell" rating on the shares. "There is not much positive in the operating results either, as margins in corporate lending remain under pressure." Net interest income declined 0.3 percent to 142.2 million euros, while commission income fell 9.1 percent to 23.1 million euros. Costs rose 16 percent to 76.8 million euros. The bank's shares fell 10 cents, or 0.7 percent, to 13.80 euros at 9:19am in Frankfurt. They have lost 49 percent since the end of June, cutting the company's market value to 1.21 billion euros. At least 40 shareholders are seeking damages from IKB in a lawsuit filed on Thursday that claims the bank misled investors about the impact on earnings from rising United States subprime loan delinquencies. On July 20, IKB said that it would meet its full-year profit target. It scrapped that pledge 10 days later after its affiliate Rhineland Funding Capital Corp, which invests in and sells short-term debt backed by assets, including subprime mortgages, couldn't get financing. State-owned KfW and German banking associations agreed to cover as much as 3.5 billion euros of losses at IKB and Rhineland Funding. The bank also replaced Chief Executive Officer Stefan Ortseifen and Chief Financial Officer Volker Doberanzke with managers from KfW, which owns 38 percent of IKB.