Home' A Plus Magazine : August 2013 Contents 12 August 2013
Biggest state banks hold
back new lending in July
China’s top four state-owned banks extended
220 billion yuan in loans in the first three
weeks of July, a slowdown after an unusually
high 170 billion yuan in new lending in the
first week of the month. The slowdown was
reportedly in response to deposits decreasing
by more than 1 trillion yuan during that week.
The spike at the start of July followed a credit
crunch at the end of June, which caused
lending rates to surge.
ICBC is top lender says
The Industrial and Commercial Bank of China
became the first Chinese bank to lead the top
1000 world bank ranking by The Banker, the
financial magazine. JPMorgan came second,
while Bank of America came third. The 2013
ranking focused on five indicators: tier-one capi-
tal, assets, pre-tax profits, capital-assets ratio
and return on assets.
Hong Kong IPO activity
stronger this year – PwC
Hong Kong will be one of the world’s top three
biggest initial public offering markets this year,
according to data released by Pricewater-
houseCoopers last month. The firm expects
that up to HK$150 billion will be raised by up
to 80 IPOs, nearly double the HK$89.9 billion
raised last year by 64 companies. While only
23 companies went public in Hong Kong in the
first half of this year, PwC expects IPO activity to
boom in the second half.
Mainland to spearhead BDO
challenge to Big Four
Martin van Roekel, the global chief executive
of BDO International, revealed last month
plans to surpass the Big Four in terms of rev-
enue in the next five to 10 years with the help
of Mainland member firms. “I expect that Chi-
nese firms will have leading positions in their
respective network and will play a very impor-
tant role within those networks and within the
development of the profession,” van Roekel
told Australia’s Business Review Weekly.
China’s securities regulator, the China Securities Regulator y Commission, an-
nounced last month that the quota for the qualified foreign institutional investor
scheme will be almost doubled to US$150 billion, from the current US$80 billion.
The expansion in the quota for the QFII scheme, which allows overseas insti-
tutions to convert currencies into yuan for investments in China-listed stocks,
indicates Beijing’s attempt to attract more foreign capital.
“Foreign investors are showing keen interest in the country’s capital market,”
the CSRC was quoted as saying by the South China Morning Post. It also said that it
would continue to attract long-term investors as a way to “reinforce the efforts to
adjust the nation’s economic restructuring and to upgrade the Chinese economy.”
Also, the pilot programme for the renminbi QFII, which allows select quali-
fied institutions to raise offshore yuan capital in Hong Kong to invest in the
Mainland’s securities markets, will now include Singapore and London, a CSRC
official told the media.
Regulator raises foreign investment
quota in bid to lure capital
CSRC ready to hand over
audit papers to U.S. regulator
Agreement marks breakthrough in dispute
The China Securities Regulatory Commission agreed last month to allow the
Securities and Exchange Commission in the United States to access audit docu-
ments of a U.S.-listed Chinese company. The move signals an easing of a two-
year dispute between the two sides over accounting scandals.
A CSRC spokesman confirmed that the commission is now ready to provide
audit papers of a Chinese company to the SEC and the U.S. audit regulator, the
Public Company Accounting Oversight Board, Reuters reported. The company in
question or when the handover will take place was not identified.
The announcement by China’s securities regulator is “an important step
towards resolving a long standing impasse on enforcement cooperation related
to companies that are listed in the United States,” U.S. treasury secretar y Jack
Lew told a news conference in Washington, following talks between both sides,
which concluded on 11 July.
Since 2010, investors have lost billions of dollars due to alleged financial
frauds at some Chinese companies. For several years, the SEC has been seeking
access to documents from the Mainland to inspect potential accounting fraud
at dozens of Chinese companies trading on U.S. markets. However, auditors
have long been resisting, citing state secrecy laws as the reason why they are
prevented from complying with the SEC’s demands.
The disclosure of papers to the SEC would mark the U.S.’s second break-
through with China concerning accounting fraud. In May, China agreed in prin-
ciple to hand over documents to the PCAOB, allowing the agency to probe audi-
tors. However, no papers have actually been transferred, according to Reuters.
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