Vol. 13 SSE Newsletter January 2014 Highlights: SSE Composite and trading volume of January 2014 showed slight decrease compared with that of the previous month. CSRC and the Ministry of Finance jointly released the No. 21 Rules regarding the Preparation of Reports for Information Disclosure Purpose of Companies Which Publicly Offer Securities - General Provisions on the Annual Report of Internal Control Evaluation. CSRC released the No.4 Guideline on Listed Company Supervision - the Commitments by Listed Companies and Their Actual Controllers, Shareholders, Related Parties and Buyers and the Fulfillment of Commitments. CSRC released the Guideline on the Statistical Indicator Standards for Securities and Futures Industries. CSRC approved the trading of polypropylene futures by Dalian Commodity Exchange. The first batch of bonds of China Development Bank was listed through the auction trading system of SSE. SSE released the SSE Management Measures on Open-end Fund Business. SSE released the Notice on Commercial Banks Issuing Corporate Bonds to Replenish Capital and the Issues Related to Listing, Trading and Transfer of the Bonds.
1. Overview of SSE Market For the last 12 months (February 2013 January 2014), the SSE Composite Index started at 2419.02 (closing price, hereinafter inclusive) on February 1 st, 2013. The index reached the highest (2434.48) on February 6 th, 2013 and the lowest (1950.01) on June 27 th, 2013. In January 2014, the index generally reflected a slight down trend, hitting the lowest point of 1991.25 on January 20 th, 2014. month. There have been 261 trading days from February 2013 to January 2014. The daily average turnover value was USD 13.48 billion for the period. The single day turnover value peaked at USD 24.24 billion on February 4 th, 2013 and reached the lowest of USD 7.73 billion on January 20 th, 2014. The daily turnover was USD 10.38 billion for January, which showed a slight decrease compared to that of the previous In terms of accumulated turnover of January 2014, the top 3 sectors were Manufacturing (USD 99 billion), Finance & Insurance (USD 32 billion) and Information Tech (USD 15 billion).
For the last 12 months (February 2013 January 2014), the monthly average number of A share new holder accounts was 210 thousand. The single month number of new holder accounts peaked at 390 thousand in March 2013, and reached the lowest of 150 thousand in April 2013. As of January 2014, the total number of A-share holder accounts was 91.15 million. In January 2014, the daily average trading volume of ETF was USD 634 million, which represented a growth rate of 44% compared with USD 441 million in January 2013. The volume reached its highest point of USD 1,165 million on January 3 rd, 2014 and the lowest of USD 471 million on January 29 th, 2014.
2. SSE Updates On January 7, the first batch of bonds of China Development Bank (CDB) was listed through the auction trading system of the (SSE). Relevant varieties listed are CDB 1301 and CDB 1302. An amount of RMB 0.51 billion has been traded on the very day, of which, CDB 1301 claims a trading amount of RMB0.41 billion with its average trading price being RMB 99.94, while CDB 1302 claims a trading amount of RMB 0.1 billion with its average trading price being RMB 99.89. Listing and trading of CDB Bonds on SSE marks the launch of policy-related financial bonds on the exchange market, as well as the continuous orderly rationalization of the interflow between on-floor and over-the-counter bond markets. After listing of CDB Bonds, all social public investors including individuals may participate in trading of CDB Bonds. On January 8, the (SSE) has recently released the SSE Management Measures on Open-end Fund Business (the Measures ), in order to support the innovative development of the fund market and better serve all participants in the fund market. The Measures was implemented as of the issuance day. The Measures specifies an array of business lines related to the subscription, purchase, redemption, trading, and trusteeship transfer of open-end funds, as well as splitting and merging of split-capital fund units on the SSE. On January 10, the (SSE) released the Notice on Commercial Banks Issuing Corporate Bonds to Replenish Capital and the Issues Related to Listing, Trading and Transfer of the Bonds (the Notice ), which makes specific provisions on the listing and trading, transfer, information disclosure, and other issues related to corporate bonds issued by commercial banks for capital replenishment at SSE. The issuance of the Notice symbolizes that channels of commercial banks for capital replenishment have been expanded to the exchange markets, which is of positive significance for promoting the innovation of capital instruments in the banking sector and improving the integration of China s bond market. On January 14, the (SSE) released the No. 10 Memorandum of Information Disclosure of Significant Asset Reorganization of Listed Companies Continuous Information Disclosure of Reorganized Companies (the Memo ). The Memo further standardizes the verification, affirmation, and commitment of relevant matters before a listed company s reorganization and trading suspension, as well as the continuous information disclosure during the period of reorganization and trading suspension and after disclosure of the reorganization scheme, and strengthens the duty fulfillment of the reorganized company s directorate. The Memo, coupled with other reorganization memorandums previously released by SSE, constitutes the overall requirements for the continuous information disclosure of reorganized companies. On January 20, SSE selected the 2013 best institutions on the SSE bond market in 5 categories, namely, the Best Bond Dealer, the Best Underwriter of Corporate Bonds, the Best Sponsor for Listing of Enterprise Bonds, the Best Market-maker for Treasury Bonds, and the Best Innovative Institution for Bond Business.
3. Key Statistics of China CPI has been fluctuating in the last twelve months. The YoY growth rate was 3.2% in February 2013, and decreased to 2.1% in May 2013. CPI decreased to 2.5% in January 2014. From February 2013 to January 2014, M2 generally kept its increasing momentum. M0 increased slightly from USD 0.96 trillion in February 2013 to USD 1.21 trillion in January 2014; M2 increased from USD 15.9 trillion in February 2013 to USD 17.8 trillion in January 2014. Funds raised to new loan ratio were volatile on China s exchange market. The average from February 2013 to January 2014 was 4.6%, with the highest of 12.7% in December 2013 and the lowest of 1.4% in June 2013.
4. Policy Updates on China s Capital Market On January 3, in order to regulate the information disclosure regarding internal control of listed companies, building on the previous experience and extensive public opinions solicited, CSRC and the Ministry of Finance jointly released the No.21 Rules regarding the Preparation of Reports for Information Disclosure Purpose of Companies Which Publicly Offer Securities - General Provisions on the Annual Report of Internal Control Evaluation, aiming to improve the quality of information disclosure regarding internal control evaluation of listed companies. On January 3, CSRC officially released No.4 Guideline on Listed Company Supervision - the Commitments by Listed Companies and Their Actual Controllers, Shareholders, Related Parties and Buyers and the Fulfillment of Commitments. We at the CSRC have always attached great importance to the fulfillment of commitments made by listed companies and their actual controllers, shareholders, related parties and buyers. On January 7, 2013, CSRC released to the public the Guideline on the Statistical Indicator Standards for Securities and Futures Industries (the Guidelines on Standards), which came into effect on May 1, 2013. In order to keep up with the development of securities and futures business and the growing supervisory need, CSRC made another periodic amendment and released the Guidelines on Standards (as amended in 2013), which will come into effect on February 1, 2014. On January 10, in order to further enhance the quality of information disclosure of listed commercial banks and protect the lawful rights and interests of investors, CSRC has released the amended No.26 Rules regarding the Preparation of Reports for Information Disclosure by Companies Which Publicly Offer Securities - Special Provisions on Information Disclosure by Commercial Banks, which came into effect on the day of the release. On January 17, CSRC held a press conference, confirming that the Asset Management Association of China (the Asset Association) would be in charge of administering the registration of private investment fund managers, the filing of private funds and the self-regulation of the industry. With the release of the Measures on Private Investment Fund Manager Registration and Fund Filing (Trial Implementation) by the Asset Association marked the official launch of the registration and filing of private funds. Recently, CSRC approved the trading of polypropylene futures by Dalian Commodity Exchange. The date for the official listing of polypropylene futures contract will be decided by DCE. On January 21, to reinforce financial infrastructure, facilitate sound and efficient operation and overall stability of financial markets and fulfill China s duties as a member of IOSCO, the People s Bank of China and CSRC respectively issued the Notice of the General Office of the People s Bank of China on Implementing the Principles for Financial Market Infrastructure and the Notice on Implementing the Principles for Financial Market Infrastructure, as a step in implementing the Principles for Financial Market Infrastructure released by the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO). On 20 January, witnessed by Chinese Premier Mr. Li Keqiang and Belarusian Prime Minister Mikhail Myasnikovich, Mr. Liu Xinhua, Vice Chairman of China Securities Regulatory Commission (CSRC) and Vladimir Amarin, First Deputy Minister of Ministry of Finance of Republic of Belarus (MOF) signed Memorandum of Understanding (MOU) Regarding Securities and Futures Regulatory Cooperation in Beijing. The MOU between the two regulators will enhance exchanges of views and cooperation in the field of
securities and futures supervision, and promote sound development of capital markets in both jurisdictions. It marks a new stage in securities regulatory cooperation between the two countries. 5. QFII, RQFII & QDII As of January 27 th, 2014, the approved quota for QFII, RQFII and QDII were USD 51.42 billion, USD 26.63 billion and USD 85.04 billion respectively. The newly approved quota for QFII, RQFII and QDII in January 2014 was USD 1.7 billion, USD 1.6 billion and USD 1.8 billion respectively.
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