IN BRIEF (Page 19)

UnionPay spreads wings in Thailand

UnionPay International, the Chinese card payment system, and the Thai Bankers Association have signed an agreement to make UnionPay the standard chip card for local banks across the Thai banking industry.

It makes Thailand the first foreign country to adopt UnionPay as its standard chip card. Banks in Thailand are required to issue all debit cards and some credit cards with chips by next year.

"The partnership with UnionPay International will modernize Thailand's financial system and help our banks improve their card services with more safety and convenient features," said Kobsak Duangdee, secretary-general of Thai Bankers Association.

Tongurai Limpiti, vice-governor of the Bank of Thailand, said the use of chip cards will be crucial in promoting digital payments, as the country moves toward more transactions being done using plastic.

Real estate firms jumponto bond bandwagon

Real estate companies are flocking to the domestic bond market to raise funds, as more lenders offer cheaper rates and previous restrictions on issues have ended.

About 60 listed property companies have announced plans to issue bonds this year for a cumulative amount of 250 billion yuan ($35.3 billion), according to data provided by Centaline Property Agency.

The amount of issues for this month alone is more than that raised last year, when 15 listed companies sold 23.5 billion yuan of bonds.

The bond splurge is a result of the China Securities Regulatory Commission's accelerated approvals for developers' bond offerings to help avert a slump in the real estate and construction sectors that make up about one-third of the economy.

Central bank injects $18.7 billion into market

The People's Bank of China injected 120 billion yuan ($18.7 billion) worth of seven-day reverse repurchase agreements, or short-term loans to commercial lenders, into the interbank market on Aug 18.

It was the largest single-day injection by the central bank since January last year, when the bank offered 150 billion yuan via 14-day reverse repos. The interest rate remained the same at 2.5 percent.

Experts speculated that tightening liquidity in the market amid intensified capital outflows has forced the bank to increase money supply and stabilize the financial market.

According to the State Administration of Foreign Exchange, net sales of foreign exchange were worth 265.5 billion yuan last month, compared with a net purchase of 1.02 trillion yuan in June and 7.8 billion yuan in May.

Personal investable assets to increase

Personal investable assets are expected to grow 13 percent annually to reach 196 trillion yuan ($31 trillion) in the next five years, a report said.

The number of high-net-worth families is forecast to rise 11 percent every year to 3.46 million during the same period, said the report issued by Industrial Bank Co Ltd and The Boston Consulting Group on Aug 18.

Between 2013 and 2015, China recorded annual growth of 21 percent in personal investable assets, which are expected to reach 110 trillion yuan by the end of this year.

The rapid increase in private wealth is the result of various factors, including relatively high GDP growth, the demographic dividend and the fast growth of the capital market in the past three years, the report said.

As the core regions of China's economic growth move from eastern coastal areas to inland areas, high-net-worth families will have greater potential for growth in Chongqing municipality, Sichuan and Henan provinces, and the Inner Mongolia autonomous region, compared with Beijing, Shanghai and Guangdong province.

Investors look for options overseas

Investors from China are increasingly scouting for opportunities in overseas markets due to the wild swings in the domestic capital markets and currency weakness, said an industry report published on Aug 17.

The report, jointly published by Manulife-Teda Fund Management Co Ltd and Manulife-Sinochem Life Insurance Co Ltd and based on responses from 216 investors across China, said investors are particularly interested in real estate, mutual funds and fixed-income products.

The overall investment sentiment remained bullish during the second quarter of the year.

Demand for wealth management products rose during the period, the report said, with about 60 percent of the respondents keen on professional wealth management services.

Lenovo plans to axe 3,200 jobs

Lenovo Group Ltd said it will lay off 3,200 employees after it announced a 51-percent year-on-year fall in net income for its first fiscal quarter which ended in June.

The cuts, which will occur mainly in the company's newly acquired Motorola Mobility unit, represent about 10 percent of its global non-manufacturing headcount.

Yang Yuanqing, chairman and chief executive of Lenovo, said poor smartphone sales and worsening global demand for personal computers necessitated the job cuts.

"We are planning to reduce expenses by about $1.35 billion for this fiscal year, including reductions of about $800 million from the Motorola unit," Yang said.

Hit by slowing PC and smartphone demand, the company's net profit dropped to $105 million in the first quarter, compared with $214 million a year ago, Lenovo said. In the PC business, which has been Lenovo's cash cow till now, pretax income fell 8 percent year-on-year despite a growth in market share.

Gold set to regain luster again

Gold demand in China fell 3 percent in the second quarter of the year to 216 metric tons on the back of slowing economic growth and lower offtake, the World Gold Council said.

In its quarterly outlook for the precious metal, the council said the prognosis for the next six months is better as demand is increasing, and more investors are keen on diversifying their investment options amid fluctuating stock markets and a weaker currency. According to the council, China's demand for gold jewelry fell 5 percent from a year ago to 174 metric tons at the end of the second quarter.

"Demand for gold, both jewelry and investment items such as coins and bars, has been recovering in China, as price-sensitive consumers are cashing in on the price drops and diversifying their risks by using gold as a hedge against risks from other sectors," said Roland Wang, managing director of the council's China operation.

Healthy inflows likely to keep FDI robust

Foreign direct investment into China is expected to remain stable in the longer term after the nation devalued its currency to put economic growth on a firmer footing, experts said.

China's foreign direct investment rose 5.2 percent last month to 50.55 billion yuan ($7.89 billion) from the same period a year ago, a 0.7 percent growth from the previous month, the Ministry of Commerce said. FDI in China grew 7.9 percent year-on-year to 471.1 billion yuan between January and July.

Huang Feng, deputy director-general of the Ministry of Commerce's department of foreign investment administration, said investment from major countries and regions including the United States, the European Union and Hong Kong, during the first seven months.

FDI into the manufacturing sector waned in the first seven months, whereas it rose in the services sector.

(China Daily European Weekly 08/21/2015 page19)