Ministry proposes lowering threshold for foreign investors in listed companies


Jul 30– Aug 3, 2018

The Ministry of Commerce proposed on Monday to lower the threshold for foreign investors to participate in strategic investment in listed companies in China. In a draft of revised rules, the ministry suggested to review strategic foreign investment applications in the country's listed companies of national security concerns according to national security rules. Foreign investors will not be allowed to transfer A-shares of listed companies for 12 months after obtaining them via strategic investment, according to the document. The period used to be three years. The draft was published on the ministry's website to seek public comments. People can comment until August 29, 2018.

Caixin Manufacturing PMI eases to 50.8 in July

China's manufacturing sector continued to expand in July, registering slightly slower growth compared to the previous month amid weakening trend of export orders, according to a private survey on Wednesday. The Caixin Manufacturing PMI edged down from 51.0 in June to 50.8, data showed. The reading stayed above 50, indicating the manufacturing sector remains in expansion range. Zhengsheng Zhong, an economist at CEBM Group, attributed the mild expansion in July to decline of export orders. He said easing pressure on capital turnover and on stocks of purchase played positive roles. Earlier this week, the official PMI by showed manufacturing activity fell to 51.2 in July from 51.5 in the previous month. The reading by Caixin mainly measures activities of small and medium-sized enterprises, while the official data gauge activities of large scale companies.

China's cultural industry posts steady growth in H1

China's cultural industry maintained steady revenue growth in the first half of 2018, boosted by strong gains by news and information service providers, data showed Tuesday. Combined revenue of the sector's major companies, whose annual revenue was five million yuan ($733,500) or above, reached 4.22 trillion yuan during the January-June period, up 9.9 percent year-on-year, according to the National Bureau of Statistics (NBS). The growth was 0.6 percentage points lower than the first quarter of this year and 1.8 percentage points lower than the same period of last year. In breakdown, revenue from news and information services increased the most in H1, up by 29.4 percent from one year earlier, followed by advertising and design as well as content producers such as publishing houses and online games, which rose 15.1 percent and 11.9 percent, respectively. The NBS data came from a survey of 59,000 companies across nine cultural sectors in 31 provincial regions. As the country tries to shift its growth model to one that draws strength from domestic demand and services, it is planning to develop the cultural industry into a pillar industry of the national economy by 2020.


Sector Overviews

Top-and bottom-5 performing CITIC securities sectors of this week


Indexes performance (as of Aug 3, 2018)


Market Outlook


The A-share market opened slightly lower on Friday. Both the SHCOMP and ChiNext oscillated lower, and the latter even fell below the 1,500 level. The indices had a temporary rebound in the afternoon with the help of the cyclicals, but given weak buying momentum, the broader market headed south again, and the SZSE Component Index finished lower for the eighth consecutive day.

We believe the market has been affected by various factors, including concerns about the economic downturn and an escalation in the Sino-US trade dispute. Despite positive policy support and historically low valuations, market sentiment remained weak, given the uncertainties in the medium term, and speculative trading activities dominated in the market. Therefore, we believe the market will continue to consolidate going forward. (China Galaxy International)




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