|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||7.87 - 7.96|
|52 Week Range||7.87 - 10.89|
|Beta (5Y Monthly)||0.74|
|PE Ratio (TTM)||3.54|
|Forward Dividend & Yield||0.68 (8.48%)|
|Ex-Dividend Date||Jul 06, 2020|
|1y Target Est||N/A|
(Bloomberg Opinion) -- China may be the only major economy to notch growth at all in 2020, quite the reversal after the onset of Covid-19 triggered a historic collapse early in the year. This revival has been reflected in the yuan, Asia's best performing currency this quarter. There’s good reason to think it isn’t a fluke.Bloomberg Economics projects China’s gross domestic product will grow 2% this year; the Organization for Economic Cooperation and Development last week raised its forecast to 1.8%. That’s miles ahead of the first quarter’s 6.8% plunge. Recent data suggest the bounce might have staying power: Exports and industrial production have chugged away over the past few months, while retail sales rose for the first time in August since the pandemic began.In that light, it’s little surprise the yuan has gained more than 4% since the end of June, after weakening in the first three months of the year and stagnating in the second quarter. This trend also comes amid the central bank's relatively restrained approach to juicing the economy. The People's Bank of China hasn't performed the gymnastics of the Federal Reserve, or toyed with the negative interest rates that prevail in Europe and Japan, and might soon be considered in the U.K. And like many Asian currencies, the yuan has been buoyed by a weakening dollar as the Fed slashed rates and resumed quantitative easing.The PBOC is a familiar presence in markets and limits how much the currency can fluctuate in a given day. So this isn't a pure rally the yuan is enjoying. It’s happening because the authorities are tolerating it. The central bank frets about financial instability a softening currency could bring, and has warned that ultra-loose policies pursued by developed-world central banks have had too many spillover effects. Policy makers spent the year before the pandemic worrying about the accumulation of too much debt. (For its part, China has been known to change the rules suddenly, leading to massive gyrations across global asset classes.)Over the years, the reason cited most often for halting or damping the yuan’s periodic appreciation has been the potential threat to export competitiveness. Until 2005, the yuan had a hard peg of 8.3 per dollar that was almost entirely about preserving the advantage of a weaker currency. As China tinkered with the system, exports gradually became less important and policy makers encouraged a shift to services, which accounted for more than half of gross domestic product by 2015. Might China, in the Covid-19 world, renew its ardor for — or dependence on — shipping stuff to the world? In the midst of an epic global contraction, it’s tempting to grab every piece of growth you can hang on to.Right now, China’s exports don’t appear to be suffering, rising 9.5% in dollar terms in August and notching the third-biggest increase ever. The current account, the broadest measure of trade, had been shrinking and was on course to disappear as a percentage of GDP. That trend looks to have been arrested, albeit temporarily. China may record a surplus of 3% in 2020, the most in a decade, according to Capital Economics. Still, it’s not inconceivable there could be too much of a good thing and the PBOC might lean against the yuan's rise. “These days the PBOC’s aim is to smooth, not prevent, exchange rate adjustments,” writes Julian Evans-Pritchard, Capital Economics’ senior China economist.The rest of Asia has reason to root for China’s resilience. In April, when Beijing reported its disastrous first-quarter GDP decline, I wrote that the one-time economic engine might not bail Asia out this time. Historic contractions tore through the region. But as China came to life, it began steadying some parts of neighboring economies. In Singapore, for example, exports are improving, in large part reflecting mainland demand. Beijing’s economic conflict with the U.S. hasn't dissolved ties between Asian export hubs. A stronger currency tends to enhance the allure of imports.If China is settling in for a protracted rivalry with the U.S., a strong currency may be appropriate. You want to attract direct foreign investment and continue opening your capital markets to international investors. The more economic stability China amasses, the bigger its gravitational pull in the region.Add all these factors up and we’re likely to see a bit more vigor for the yuan. That is, as long as it’s convenient for China.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Moody's Investors Service has assigned long-term and short-term issuer ratings of A3 and Prime-2 to Bank of China (Australia) Limited (BOCAL), which is wholly owned by Bank of China Limited (BOC, A1 stable). Moody's has also assigned a baseline credit assessment (BCA) of baa1 and adjusted BCA of baa1, long-term and short-term Counterparty Risk Assessments (CR Assessments) of A2(cr) and Prime-1(cr); and long-term and short-term Counterparty Risk Ratings (CRRs) of A2 and Prime-1.
(Bloomberg) -- China is tightening rules and imposing capital demands on sprawling empires such as Ant Group and China Evergrande Group in its latest attempt to curb risks in the nation’s $49 trillion financial industry.The new regulations will require licenses for non-financial companies that do business across at least two financial sectors, and which are designated as “financial holding companies,” the State Council said Sunday on its website. Any application must be submitted within 12 months after the rules take effect on Nov. 1.Companies with a banking operation and financial assets of more than 500 billion yuan ($73.1 billion), or those with financial assets exceeding 100 billion yuan must seek a license. Those that are denied a license must sell their stakes in the financial companies or give up control, according to the rules.Chinese authorities are plugging regulatory loopholes and stepping up their bid to maintain stability as the Covid-19 pandemic pummels economic growth and bad loans pile up. In 2018, the central bank identified Evergrande, HNA Group Co., Fosun International Ltd., Tomorrow Group as well as billionaire Jack Ma’s Ant as financial holding companies, putting them under increased scrutiny because of their growing role in the nation’s money flows and financial plumbing.The move will “prevent spillover of risks and promote healthy circulation between the economy and the financial industry by imposing complete, sustainable and thorough regulation on capital, behavior and risks,” the People’s Bank of China said in a separate statement.Companies covered under the regulation will need at least 5 billion yuan in actual paid registered capital, which should account for at least 50% of the combined registered capital of their controlled financial entities, according to the rules.Loan LeaderAnt has emerged as a consumer loan leader in recent years with the help of an array of banks. The firm also operates payments systems, owns a stake in an online bank, and runs insurance and wealth management units.In anticipation of tighter rules, Ant plans to apply for a financial holding license through its Zhejiang Finance Credit Network Technology Co. unit, according to the prospectus for its initial public offering released last month. Ant is considering putting certain financial entities into the arm to help reduce the potential capital needed under the proposed rules, people familiar with the matter said last year.In its 2018 financial stability report, the central bank warned that the work of regulating was becoming increasingly complex, with firms rapidly expanding in the financial sector through cross border alliances and intricate corporate structures, tied together by connected transactions and investments in existing financial institutions.At the end of 2016, about 70 central government-owned enterprises had a total of over 150 financial subsidiaries. Another 28 private firms each had stakes in at least five financial units.HNA, the indebted airline-turned-global takeover hunter, has sold off tens of billions of dollars in assets since 2018, including stakes in Hilton Worldwide Holdings Inc. and Deutsche Bank AG. Earlier this year, Chinese authorities announced the government would take control of the group, likely paving the way for speedy asset disposals to help repay about $75 billion of debt.Evergrande, a real estate developer controlled by billionaire Hui Ka Yan, spent heavily on other financial assets before slowing down in 2018. It owns Shengjing Bank Co., a lender in China’s northeast province of Liaoning, as well as a mid-sized insurance company.Another conglomerate that could be subject to the new regulations is Fosun, controlled by billionaire Guo Guangchang. Its operations span insurance, banking, retail, tourism and pharmaceuticals. Fosun has also spent billions acquiring assets including French fashion brands, Portugal’s largest insurer and European soccer clubs.The new rules will blacklist certain individuals from becoming major or controlling shareholders in financial holding firms, such as people who falsified capital injections or undertook illegal activities at financial entities. Such firms must have simplified and transparent ownership structure compatible with its scale and risk management capabilities, according to the PBOC.Beijing in July seized control of nine financial firms that are linked to Tomorrow Group, the investment conglomerate owned by financier Xiao Jianhua. Xiao taken from a hotel in Hong Kong by Chinese authorities in 2017 and hasn’t been seen in public since.(Adds PBOC comment in the fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.