China is set to resume permitting IPOS as soon as July, according to regulatory sources who told Reuters and Bloomberg that once new rules were in place, the 600-plus flotations that were stalled will get the green light.Originally more than 800 companies got in line for a market listing, but almost a fifth have since pulled their applications, citing accounting issues or a decline in profits.
Billions of dollars in new issues were put on ice in October last year as the authorities cracked down on fraud and tried to restore confidence in the equities market. China’s burgeoning middle class is hard-pressed to find good investment and wealth creation opportunities due to the paucity of mainstream vehicles, which is one of the reasons behind the explosion of a parallel financial system, known as shadow banking.
But this pressure should ease if IPOs kick off again by the end of July, as is expected. Plus they should inject much-needed capital into the market, which could offset the flagging growth in China’s economy.The new rules for companies hoping to tap markets for funding include greater scrutiny of financial performance. And if any company that lists on an exchange reports a 50% or more drop in profits or a net loss, the investment bank that advised the listing may find the doors closed when it goes to the regulators on behalf of other clients.
Hong Kong has turned its eyes on HSBC in the ongoing investigation into HIBOR interbank interest rate manipulation, which has already named and shamed UBS. Bloomberg reports that the central bank has extended its probe to “a number” of banks, and has instructed HSBC to “promptly implement” remedial measures required by Singapore’s central bank last week following a similar probe in the city-state.The Hong Kong Monetary Authority investigation is ploughing through millions of communication messages, indicating that the process could take years to complete.
The US holding company of failed investment bank Lehman Bros has blocked a proposal to return AUD$210 million to Australian clients of Lehman Bros. The clients, who include councils, charities and churches, have been in pitched battle with Lehman since it collapsed in 2008. There was light at the end of the tunnel earlier this year, the Sydney Morning Herald reports, when a tentative agreement was reached to return 50c on the dollar. But the US holding company has just bought up rights from a key creditor, Lehman Brothers Asia, allowing it to vote down the proposal. A representative of the not-for-profit creditors has accused the US company of “not coming to negotiate on a principled basis.
Executive liability insurance is a major cost for Chinese companies that have listed in the US. The Claims Journal reports that the cost of insurance to cover directors and officers of Chinese companies against lawsuits has soared, with premiums reaching as much as USD$100,000 per USD$1 million of coverage in some cases, up from a range of USD$10,000 to USD$15,000 a few years ago.
Hong Kong has dropped from being China’s second most competitive region to its fifth due to slower economic growth and weaker governance, according to the China Institute of City Competitiveness annual survey. Hong Kong was overtaken by Jiangsu, Shandong and Zhejiang provinces in terms of overall competitiveness in the past year.
You could be forgiven for thinking that a YouTube video of Buddhist monks in aviator sunglasses, wearing wireless headphones, and sporting luxury travel bags while travelling on private jets was a spoof on Saturday Night Live or Not the Nine o’Clock News, parodying the notorious lifestyles of over-paid investment bankers or blinged-up rap stars. Yet it seems that some monks have developed similar predilections for the good life. Rather than spurning a life of indulgence, monks from a monastery in northern Thailand have been swapped their monastic existence for lavish behaviour, according to the Financial Times, attracting the ire and censure of the country’s Buddhism body.