Out of the teapot

Article Abstract:

The Chinese bond market is struggling to induce foreign investment and provide a viable option to domestic savings. However, the rate of return for both underwriters and investors offers scant incentive. Ratings of Chinese bonds are considered unrealistically high, which reduces confidence in the market. Furthermore, regulations do not clearly stipulate whether borrowers must get approval from the local or national offices of the Ministry of Finance and the People's Bank of China. Until such confusion is cleared, confidence in the Chinese bond market is likely to remain low.

Credit market, Credit markets

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Steel a steal? Fund managers find value in new Maanshan offer

Article Abstract:

China's Maanshan Iron & Steel Co plans to make the fifth and so far the largest offering of Chinese stock on the Hongkong exchange. The offering, in which Maanshan will float $440 million worth of shares, is important because its success would encourage the Chinese government to allow the listing of additional mainland firms in Hongkong. Investors are pleased with the issue because excellent price-earnings ratios make it a good buy. Wardley Corporate Finance is heralding the issue as a sign that in China steel is a sunrise rather than a sunset industry.

Steel industry, Maanshan Iron and Steel Co.

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Chinese lessons

Article Abstract:

An intermission in Chinese listings on the Hongkong stock exchange both gives investors time to sort out prospectuses and allows China's austerity drive to play out. The listings were oversubscribed by 1.2 to 110.5 times, sometimes in spite of huge outstanding debts between state-owned enterprises. Four companies were listed in the past two months, with five more coming in fall 1993. The market may resist new listings over $125 million.

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