So quipped Jim Coulter, co-founder of TPG as he launched their second private equity fund in China in as many days; and $1.5 billion in total. Working in JV with the Chongqing and Shanghai governments, TPG will invest in private companies across a range of sectors. Elsewhere, Huijin, the domestic arm of China’s sovereign wealth fund, raised a similar amount ($5.9 billion) in bonds to invest in the Nation’s banks.
Societe General is also supporting China’s banks, albeit less tangibly, saying the Government would probably tolerate breaching lending limits to sustain growth i.e. there is a 60% likelihood that it will allow “drift upwards” given “the moderation in the growth momentum in recent months”. Citigroup was also in bullish-ish mood saying that low interest rates in the US and a weak dollar are traditionally positive for Chinese equities. It also raised its recommendation on property stocks and raw materials producers to “neutral” from “underweight”.
On both counts property stocks had a good day, aided and abetted by a 72% rise in Shenzhen home sales and positive comments from JLL.
“Except in mathematics, the shortest distance between point A and point B is seldom a straight line”.
Shanghai Composite:
Today: +0.42% at 2,650.31 at close
This week: +0.3%
YTD: -19.1%
Hang Seng:
Today: -1.15% at 20,658.71 at close
This week: -1.5%
YTD: -5.6%
Oil: $72.26
Gold: $1221.00
Euro/$: 1.2618
Headlines
- China will “tolerate” a breach of loan target to sustain growth, says Societe Generale
- Chinese stocks will benefit from extended low global rates, says Citigroup
- PBOC’s Ma pledges moderately loose monetary policy
- TPG to set up Yuan 10 billion worth of funds in JV in both Chongqing and Shanghai
- China property stocks gain most in a week after 72% rise in Shenzhen home sales
- Central Huijin Investment sells $5.9 billion worth of seven year bonds with a 3.16% coupon and 20 year debt at 4.05%
- PBOC sells one year bills at unchanged yield of 2.0929%
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