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Greece looks to China for investors

Greece's state-asset sales fund chairman said the country was looking in China for investors with a long-term horizon as the government ramps up the pace of asset sales.

The next step in the program is the sale and leaseback of 28 state-owned buildings, Chairman Takis Athanasopoulos said in Athens on Tuesday at a conference on Greek-Chinese business cooperation. Greece wants to attract significant capital for investments, he said.

Ministry may sell 10-year bonds

The Ministry of Finance will sell at least 30 billion yuan ($4.7 billion) of 10-year bonds at a yield of 3.52 percent on Wednesday, according to the median estimate in a Bloomberg News survey.

The highest forecast was 3.55 percent and the lowest 3.50 percent, the survey of five finance companies showed. The estimate compared with the 3.57 percent yield on similar-maturity notes in the secondary market on Monday, according to data compiled by Chinabond.

Investors will bid on the yield at the auction. The issuer will set the security's coupon by taking an average of the winning bids.

Issuers delay, cancel bonds

Three Chinese bond issuers have delayed or canceled bonds in the past week, as concerns grow that the US Federal Reserve's monetary easing will stoke already accelerating inflation in China.

Sichuan Expressway Construction & Development Co, which builds roads in the mountainous southwestern province, will delay the sale of 3 billion yuan ($475 million) of notes that had been planned to take place the end of this month, according to a company statement on Tuesday. That follows cancellation of a debt sale by China Development Bank, the country's biggest lender to government projects, and the postponement of an offering by Xinao China Gas Investment Co last week.

Inflation in China accelerated for the first time in five months in August, with prices advancing 2 percent from a year earlier compared with 1.8 percent in July.

Money rate jumps to 3-week high

China's money-market rate jumped to its highest level in three weeks after the central bank auctioned treasury deposits at higher yields, reflecting banks' expectations that cash demand will rise as the end of the quarter nears.

The overnight repurchase rate rose for a second day after the People's Bank of China offered 40 billion yuan ($6.3 billion) of three-month treasury deposits to commercial banks on behalf of the Ministry of Finance at a yield of 3.7 percent, compared with 3.52 percent at the last sale in August. That was the highest rate since September 2011 in similar-maturity auctions.

"The higher yield shows commercial banks are preparing for a cash crunch around the end of this quarter," said Wang Huane, a senior bond trader at Qilu Bank Co in Jinan, Shandong province. "The central bank is trying to prevent a cash shortage by using reverse-repurchase agreements, but they are limited in solving the problem."

Banks' net-currency sales accelerate

Net sales of foreign currency by China's central bank and financial institutions accelerated last month, suggesting capital outflows picked up as the nation's economic slowdown deepened.

Yuan positions at financial institutions accumulated from foreign exchange purchases fell 17.4 billion yuan ($2.75 billion) to 25.64 trillion yuan at the end of August from 25.658 trillion yuan in July, the People's Bank of China said on Tuesday. That compares with net sales of 3.82 billion yuan in July.

The report follows data showing foreign investment in China fell in July to the lowest level in two years amid signs economic expansion may decelerate for a seventh quarter. At the same time, the US Federal Reserve's decision last week to buy mortgage debt in a third round of so-called quantitative easing may increase investors' appetite for yuan assets, said Joy Yang, a former International Monetary Fund economist.

"Capital outflow risks are moderate for China as long as it has the monetary tools to neutralize the impact," said Yang, now chief Greater China economist at Mirae Asset Securities (HK) Ltd in Hong Kong. Outflows are "tiny compared to China's $3 trillion foreign-exchange reserves," she said.

Nokia sets up innovation center

Cellphone maker Nokia Corp set up its Experience & Innovation Center in Beijing on Tuesday, to help 30 Chinese startups become listed in three to five years.

The Finnish company said that it will create a platform for mobile Internet startups in China. The center will provide various developers and entrepreneurs with advice and solutions, to encourage them to grow their businesses.

The center will select 3,000 entrepreneurial ideas, help set up 300 technology startups and aid 30 companies out of them to be listed in major stock markets across the world in the following three to five years, said Lin Qizhong, vice-president of Nokia (China) Investment Co Ltd.

"Beijing is an important engine for the development of China's mobile Internet industry. That's why Nokia established the center here," Lin said.

Ministries promote hybrid buses

The use of hybrid buses, including plug-in hybrid electric buses, will be promoted in all Chinese cities as the central government plans subsidies to companies and institutions that buy them.

The announcement came in a joint statement from the Ministry of Finance and three others.

In January 2009, the four ministries launched a promotion of energy-saving and new-energy buses. Twenty-five cities took part, but many of them didn't achieve the aim of changing to the new buses.

The government will select hybrid-bus brands through a bidding procedure, as it seeks vehicles that can save energy and reduce emissions while providing a stable performance, according to the statement.

Total subsidies will be limited to 3,000 to 5,000 buses.

Tenpay to serve Weixin users

The online payment platform Shenzhen Tenpay Co Ltd said on Tuesday it will provide mobile payment services for weixin users.

The service will be available in the fourth quarter, said Jim Lai, general manager of Tenpay, which was founded by Tencent Holdings Ltd.

The move is believed to be Tencent's first step to commercialize weixin, a smartphone-based social networking application that was also developed by Tencent and had accumulated 200 million users in 14 months.

"Mobile payment will be a vital sector for Tenpay, and the linkup with weixin will help us add users," Lai said.

Competition between online payment platforms is about to heat up as more players enter the market, he said.

This month, Tencent CEO Pony Ma pledged to further develop mobile Internet-related services and indicated weinxin would be an important gateway for Tencent to tap into the sector.

Turnover of third-party payment services nationwide hit 94 million yuan ($14.87 million) in the second quarter, 23 percent more than the first quarter, according to Analysys International.

China Daily-Agencies

(China Daily 09/19/2012 page14)