Haitong Securities
22 марта, 05:36

PBOC Raises Interest Rate On Open Market Operations

Moments after the Fed did as expected when it raised rates by 25bps, we - along with most other central bank watchers - made a prediction: now it was China's turn. And now, it's China's turn to hike — zerohedge (@zerohedge) March 21, 2018 And since in recent years, the PBOC has not hiked the main benchmark rate but engaged in "targeted" tightening using the various reverse-repo facilities, we had to wait until today's open market operation was unveiled. This was somewhat problematic as the PBOC only did a partial reverse repo, skipping the 14, 28 and 63-day operations, and only injecting liquidity - some 10BN yuan worth - via 7-Day reverse repos (in the process draining 150Bn yuan). Which meant that the only instrument that could see its rate changed today, was the 7-Day RR. And just like on December 13, hours after the last Fed rate hike, when it hiked the 7-Day reverse repo rate by 5bps from 2.45% to 2.50%, so moments ago the PBOC once again raised the 7-Day repo rate from 2.50% to 2.55%, continuing the tradition of raising reverse repo rates in response to Fed rate hikes. We expect proportional increases on the other reverse repo - 14, 28 and 63-day - tenors. Commenting on the move, the PBOC said the rate hike was in line with market expectations, adding that the open market rate hike will "help limit irrational financing and stabilize overall leverage ratio." Curiously, even this modest increase came as a surprise to some watchers, who noted that the PBOC no longer needs to follow the Fed moves tick for tick as the recent strength of the yuan means there’s less need to protect the currency. That was the view of Haitong Securities, which ahead of today's rate hike noted that even if the PBOC raises open market operation rates (which it did), "the scale will be limited and impact on market rates minor because they’ve been a lot higher than official rates." Meanwhile, as discussed recently, total social financing growth  continues to decelerate... ... and inflation remains under pressure. And speaking of China's currency, following today's dollar plunge, the PBOC predictably fixed the Yuan at 6.3167, some 0.4% stronger vs Wednesday's 6.3396, the biggest move since February 27. Followign the rate hike, just like in the US, Chinese shares fell, with the Shanghai Composite falling -0.2%, wiping out an earlier 0.2% gain. If the SHCOMP closes red we wonder if Marko Kolanovic will blame the drop in Chinese stocks on a rogue snowstorm over the Gobi desert.

06 марта, 19:01

B&R bonds issued to finance initiative

Companies now have a new channel to finance their Belt and Road projects as China has introduced Belt and Road bonds to fund the massive initiative.

23 января, 19:01

Banks lift stocks to end at new high

SHANGHAI stocks closed yesterday at a new high since December 30, 2015, as banking shares led gainers after banks posted solid earnings growth and also on the Chinese central bank’s liquidity boost to

26 июня 2017, 19:01

Stocks rally on MSCI optimism

SHANGHAI stocks rose yesterday, led by blue chips, after MSCI suggested it could raise the weighting of China’s A shares in its emerging markets index. The Shanghai Composite Index increased 0.87 percent

19 июня 2017, 19:01

Stocks gain as liquidity concerns eased

SHANGHAI stocks rose yesterday as liquidity concerns were eased after the central bank injected funds via open market operations. The Shanghai Composite Index gained 0.68 percent to 3,144.37 points. The

07 июня 2017, 17:30

Китайские компании начинают доминировать в Гонконге - Bloomberg

Влияние материкового Китая становится все более заметным в банковском секторе, сфере недвижимости и связи.

07 июня 2017, 11:50

Облигационный гамбит Мадуро: Китай выходит из игры?

Учитывая, что золотовалютные резервы Венесуэлы грозят сократиться до $10 млрд, правительство Венесуэлы хватается за финансовый спасательный круг и в партнерстве с китайским брокером Haitong Securities USA пытается перепродать облигации на $5 млрд.

07 июня 2017, 08:10

Venezuela's "Mysterious" Bond Deal Reappears, And This Time China Wants Out

As its foreign reserves dwindle to less than $10 billion, the government of Venezuela – desperate for any kind of financial lifeline - has partnered with a Chinese brokerage to try and resell $5 billion in bonds that it initially issued at a deep discount, according to the Wall Street Journal. The brokerage, Haitong Securities USA, a unit of China’s Haitong Securities, is quietly marketing the bonds to yield-starved hedge fund managers. What makes today's news particularly notable is that the original bond transaction in question was highlighted here back in January when in a post titled "In "Mysterious" Bond Sale, Venezuela Issues $5 Billion In Debt To Itself With China As Underwriter" we reported that the Maduro government appeared to be effectively selling debt, and raising dollar funds, from (and to) itself with China as an intermediary; as Reuters added at the time, the deal was peculiar in that the transaction did not bring in actual new funds for the cash-strapped OPEC nation. Quoted by Bloomberg in January, Francisco Rodriguez, the chief economist at Torino Capital in New York, said that "my guess - but it’s just a guess - is that given uncertainty as to whether Venezuela would be able to deliver the oil necessary for repayment, the Chinese may have asked for the loan to be also guaranteed with a bond,” he told Bloomberg by email, adding that he had been expecting a disbursement of $5 billion related to the renewal of a loan from China. Bond traders were just as confused as reporters and analysts: Russ Dallen, a managing partner at Caracas Capital, told Bloomberg that "bond markets will likely react with “befuddlement. Taking place on Dec. 29 with no approval by the National Assembly and no promulgation notice in the Official Gazette, this smells of some kind of end of the year financial shenanigan from a government that is out of cash and is desperately trying to hide it,” he said. As we concluded at the time, "With that assumption in place, we look forward to learning the details of just how China is now funding insolvent supplier sovereigns by the back door, and where else besides Venezuela is this arrangement in place." Five months later, we may have gotten the answer, and it now appears that Haitong had simply kept the bond without syndicating to end buyers, and - for whatever reason - is now desperate to dump them to any willing purchaser, a move which bodes poorly for China's ongong relationship with Venezuela. Reports that Venezuela is shopping around the bonds arrived just a week after Goldman Sachs Asset Management inadvertently ignited a PR crisis when it bought $2.8 billion worth of Venezuelan bonds issued by state oil company PDVSA from an obscure UK brokerage. Opponents of the brutal regime of Nicolas Maduro accused the bank of buying “hunger bonds” and Venezuela opposition leader Julio Borges accused it of “aiding and abetting the country’s dictatorial regime.” As we noted last week, it appears that Goldman turned around and sold those same bonds, which it bought at a discount, for a tidy profit. Haitong is reportedly offering the bonds at an even deeper discount than the 31 cents on the dollar that Goldman paid. But the latest batch of bonds currently on sale is different from those purchase by Goldman (and Nomura) as they remain unregistered with clearing organizations like Euroclear and the Depository Trust & Clearing Corp., which is required for the bonds to trade electronically, WSJ reported. Aside from the illiquidity issue, potential buyers have other reasons to be wary of lending to the Maduro regime: The political opposition has argued that the bond sales are illegal because they were never approved by the legislature. Some would-be buyers told WSJ they're afraid that if Venezuela defaults, the owners of the 2036 bonds wouldn’t have the same claim on the country’s debt as other bondholders because the bonds were issued through an intermediary. Of course, any potential buyer should probably be concerned about the huge sheer size of the discounts, as the WSJ points out tongue-in-cheek. “It’s like they’re having a going out of business sale,” said Russ Dallen, a partner at Brokerage Caracas Capital.   “And that’s what buyers should be worried about. Either they’re really desperate, or they’re just filling up their credit card with no plans of paying back.” There is a reason for Venezuela's desperation: after two decades of economic mismanagement, the largest global banks refuse to do business with the insolvent socialist country - which has on numerous occasions tried to lease or sell outright some of its gold reserves - making it impossible to plug holes in its budget by issuing debt. Instead, the country must rely on small and often little-known institutions to peddle its bonds.  That, and of course, hyperinflating away its debt. Venezuela’s economy has shrunk by an estimated 27% since 2013. The International Monetary Fund says inflation this year will hit 720%, and the country’s central bank hasn’t publishing basic economic indicators like balance of payments and gross domestic product since September 2015, rendering the country’s basic economic indicators, let alone calculations of its capacity to repay, a giant question mark for investors and credit rating firms alike. With that in mind, we’re curious to see who – if anyone – is willing to step up and buy the latest batch of "hunger bonds" in the aftermath of the shock treatment that Goldman received after it was revealed that Blankfein's firm may have been covertly funding Maduro's central bank. But the far bigger question is whether China - as the Haitong firesale appears to suggest - has finally given up on the melting Venezuelan ice cube, also known as one of its main foreign crude oil vendors. If so, Maduro's days are indeed numbered.

05 июня 2017, 19:01

Shares slip as investors fret over liquidity

SHANGHAI shares closed lower yesterday, led by declines in financial counters as investors fretted over concerns about liquidity and China’s economic recovery. The Shanghai Composite Index shed 0.45

12 мая 2017, 13:14

Shanghai shares up on better market sentiment

SHANGHAI stocks continued to pick up steam today as market sentiment got boosted by central bank’s move to inject funds into the market. The Shanghai Composite Index gained 0.72 percent to close at 3,083.51

08 мая 2017, 19:01

Cautious investors dent Shanghai shares

CHINA stocks yesterday fell for the fifth straight day, with the benchmark Shanghai Composite Index ending at its lowest close since mid-October, as investor fears over tightening regulations deepened. The

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26 апреля 2017, 01:30

Chinese Fugitive Guo Wengui Lost $500 Million In UBS Margin Call

Guo Wengui was secretly behind a $1 billion bet on Haitong Securities that blew up in 2015. Represented by superlawyer David Boies, Guo's legal case blaming UBS for his $500 million loss was dismissed in December.

12 апреля 2017, 19:01

Steel prices see largest drop since June

CHINA’S steel prices yesterday fell to the lowest since December after plunging 10.7 percent over the past 30 trading days — the largest decline since June — amid bearish investor sentiment on demand

11 апреля 2017, 10:13

Guotai Jun'an Securities starts flat in HK debut

SHARES in Guotai Jun'an Securities Co, the country's third largest brokerage, traded flat on the morning session of its debut day in Hong Kong, suggesting a wary appetite for industry as profit pressure

31 марта 2017, 11:12

Shanghai stocks up today on encouraging data

SHANGHAI stocks closed higher today, ending four days of declines as market sentiment was boosted by positive economic data. The Shanghai Composite Index edged up 0.38 percent to close at 3,222.51 points.

05 января 2017, 19:01

Transport and energy shares rise on reform hopes

SHANGHAI stocks ended basically flat yesterday although the transport sector and energy firms gained in anticipation that mixed-ownership reforms would boost their profitability. The Shanghai Composite

26 декабря 2016, 20:11

Shanghai rises, Tokyo dips in quiet stock trade

TOKYO stocks closed lower yesterday while Shanghai climbed and Seoul rose marginally in quiet trading, with most of the region’s other key markets closed for public holidays. Incentives were few and

12 декабря 2016, 19:01

Shanghai stocks slump

SHANGHAI stocks shed 2.47 percent to close at the lowest level in a month following fresh regulatory curbs to rein in insurers’ aggressive investment in listed companies. The benchmark Shanghai Composite

06 декабря 2016, 19:01

Financial shares’ fall brings index below 3,200 points

SHANGHAI stocks ended below the 3,200-point threshold yesterday, with financial shares declining. The Shanghai Composite Index dipped 0.16 percent to 3,199.65 points. “The index went through a small

02 декабря 2016, 19:01

Shares edge down amid weak investor sentiment

Shanghai stocks fell yesterday amid weak investor sentiment due to policy and economic uncertainties, as well as profit-taking.