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Hyundai starts auto finance venture to boost sales

Hyundai Motor Co, South Korea's largest carmaker, will start providing auto loans this month to buyers in China as it seeks to increase its share of sales in the world's largest vehicle market.

Hyundai's auto-financing venture aims to have as much as 45 percent of customers who buy Hyundai and affiliate Kia Motors Corp cars purchasing on loan in three years, Lee Kyo-chang, chief executive officer of Beijing Hyundai Auto Finance Ltd, said on Monday. The company also expects to match the 30 percent annual growth in terms of volume coverage achieved by the auto-financing industry, he said.

The automaker, based in Seoul, joins General Motors Co and Volkswagen AG in setting up an auto-financing business in China, as an increasing number of the nation's younger population embrace the idea of buying cars with borrowed money.

Ping An seeks arbitration to recoup Fortis losses

Ping An Insurance (Group) Co, China's second-biggest insurer, said it is seeking international arbitration after negotiations with the Belgian government for compensation on its investment losses in Fortis failed.

"We have no alternative but to defend Ping An's rights through legal action," the Shenzhen-based company said on Tuesday. "The Belgian government's misconduct toward Fortis back in 2008 violated the legitimate rights and undermined the interests of Fortis investors."

Ping An wrote off 22.8 billion yuan ($3.6 billion) in 2008 on its investment in Brussels- and Amsterdam-based Fortis, bailed out by three European governments after what was once Belgium's biggest financial-services firm became a casualty of the global credit crunch. Fortis shareholders in 2009 approved the sale of banking units to BNP Paribas SA, a move the Chinese insurer opposed at the time saying it destroyed the company's value and impaired shareholders' interests.

Negative outlook for half of listed companies in Q3

More than half of the listed companies on the Shanghai and Shenzhen stock exchanges are expecting losses or a slowdown in growth in the third quarter because of rising costs and overcapacity, according to Securities Times.

Of the 965 listed companies that have disclosed performance predictions for the third quarter, 489 estimated losses or reduced profits. Many companies said they have seen no significant improvement from the second quarter.

The steel industry has been hit especially hard. Chinese steelmaker Guangdong Shao-steel Songshan Co posted an estimated loss of 1.35 billion yuan ($213.93 million) in the third quarter, while it earned 2.08 million yuan net profit during the same period last year.

Suntech confident of avoiding forced delisting

Debt-ridden Suntech Power Holdings Co, one of the world's largest solar panel makers, is seeking ways to boost the price of its American depositary shares, or ADS, after it received a delisting alert from the New York Stock Exchange.

"We are confident that we will avoid the delisting and will find ways to pay off our debt by March next year," Suntech spokesman Zhang Jianmin said on Monday.

Suntech said on Friday that it had been notified by the NYSE that the company did not meet the stock exchange's price criteria for continued listing.

As of Sept 10, 2012, the average closing price of the company's American depositary shares was less than $1 per ADS over a consecutive 30-day trading period.

Under NYSE rules, the company has six months following receipt of the notification to comply with minimum share price requirements.

Suntech was recently hit by a financial fraud case for 554.2 million euros ($680 million).

Firm buys controlling stake in Hollywood giant

Chinese film producer Beijing Galloping Horse Film & TV Production Company has joined forces with India's Reliance MediaWorks to buy US-based Digital Domain Media Group, according to a source in the Chinese company, Beijing Business Today reported on Tuesday.

Previous reports said the two companies acquired Digital Domain for $30.2 million. Reuters reported that the Chinese business holds a controlling 70 percent stake in the US business, with Reliance MediaWorks holding the remaining 30 percent.

A source at Galloping Horse confirmed that the company has a "dominant stake" in Digital Domain and said an official announcement regarding the acquisition will be released soon.

Founded in 1993 by Titanic and Avatar director James Cameron and special effects guru Stan Winston, Digital Domain is one of the best-known special effects companies in Hollywood. It has worked on production of a number of blockbusters including Titanic, The Terminator series and Pirates of the Caribbean, but ran into financial difficulties recently and filed for bankruptcy on Sept 11.

Operator Orange sets up solution center in Beijing

Orange Business Services, the France Telecom-Orange branch that provides integrated business communications, has set up a solution center in Beijing, in an important step toward expanding in the Asia Pacific region, officials said.

The new center is its eighth globally and will hold interactive activities to measure local clients' specific needs and help them design customized solutions, according to Patrick Li, its chief executive officer in China.

Orange Business Services already has a Beijing R&D center with about 120 staff, but is exploring further business opportunities in emerging markets such as China and India.

Its global strategy, Conquests 2015, aims to generate $1 billion in revenues in emerging countries by that year.

Logistics property rents reach record high in Beijing

The average net effective rent of Beijing logistics property rose to a new high of 33.20 yuan per square meter a month in the third quarter, real estate service provider Colliers said in a report on Tuesday.

That represents an increase of 2.78 percent quarter-on-quarter. Demand for quality logistics property remained strong in this quarter and the vacancy rate continued to rest at a low level, as most new supply was received prior to its completion, according to the report.

The growth of online shopping means demand for logistics property should remain healthy, with companies sourcing from e-commerce and third party logistics enterprises, the report added.

Asset performance of Beijing's logistics property market is expected to be positive for the remainder of the year and for 2013.

Central bank injects record funds to ease cash crunch

China's central bank added a record 290 billion yuan ($46 billion) to the financial system using reverse-repurchase agreements, seeking to address a cash squeeze in the run-up to a weeklong holiday.

The People's Bank of China conducted 190 billion yuan of 28-day reverse repos and offered 100 billion yuan of 14-day contracts, according to a trader at a primary dealer required to bid at the auctions. Tuesday's total is the highest for a single day in Bloomberg data going back to 2004.

"Record amounts of reverse repos are to meet the surge in cash demand before the quarter-end and the holidays," said Liu Junyu, a bond analyst in Shenzhen at China Merchants Bank Co, the nation's sixth-biggest lender. "As the central bank steps up adding funds through reverse repos, it's unlikely to cut the reserve ratio this month."

The central bank kept the yields on 28- and 14-day reverse repos unchanged at 3.6 percent and 3.45 percent, respectively, the trader said.

Brilliance planning IPO of auto-components unit

Brilliance China Automotive Holdings Ltd is planning an initial public offering of its auto parts unit, said an official at Brilliance's parent company.

Brilliance is making preparations for a Hong Kong listing, said the official at closely held Huachen Automotive Group Holdings Co, asking not to be identified because the person is not authorized to comment to the media. The official declined to provide further details.

Brilliance, Bayerische Motoren Werke AG's Chinese partner, rose as much as 6.1 percent to HK$8.40 in Hong Kong trading, while the benchmark Hang Seng Index was little changed.

Huachen Automotive, based in Shenyang, is the largest shareholder of Brilliance China with a 42 percent stake, according to data compiled by Bloomberg.

Foreign exchange sales pick up in August

Chinese banks sold more foreign currency than they bought for clients in August, leading to a net sale of $6.3 billion in foreign exchange in over-the-counter transactions, figures from the State Administration of Foreign Exchange showed on Tuesday.

That reverses $500 million of net foreign currency purchases in July.

Chinese banks were net forex sellers in April this year as well as in November and December 2011. In the first eight months, Chinese banks had net foreign exchange purchases of a $23.6 billion, the currency regulator said in a statement on its website. China has the world's largest foreign exchange reserves at $3.2 trillion.

Banks' over-the-counter foreign exchange transactions have helped accumulate huge amounts in recent years, as exporters and investors sell dollars to Chinese banks, which in turn sell most of them to the central bank in the interbank market.

China Daily-Agencies

(China Daily 09/26/2012 page14)