RRR Cuts Could Free up 640b Yuan for Lending
On February 4, the People's Bank of China announced an across-the-board reserve requirement ratio (RRR) cut of 50 basis-points for commercial lenders. The cut, which took effect the following day, marked the central bank's first RRR reduction since May 2012. An additional 50 bp cut was also offered to city commercial banks and non-county-level rural banks which lend a certain portion of their deposits to micro- and small-scale enterprises. Agriculture Development Bank (ADB), one of China's three policy lenders, was given a 400 bp cut as well. Based on yuan-deposit levels at the end of last year, and an assumption that half of all rural and city commercial bank deposits will qualify for lending under the new RRR regime, the central bank's move could inject upwards of 620 billion yuan worth of commercial credit into the market, along with another 20 billion yuan in loans from ADB.
China Real Estate Data: First-Tier Sales Volumes from Jan 26 – Feb 1
Primary market property sales in Beijing totaled 1,331 units during the week ending February 1, 2015, down 42% week-on-week, according to figures from industry portal Soufun. Over the same period, sales in Shanghai totaled 5,078 units, up 1% week-on-week. Sales in Guangzhou reached 1,626 units, down 2% week-on-week. Shenzhen sales totaled 1,738 units, down 6% week-on-week. Sales in Tianjin equaled 1,594 units, up 23% week-on-week.
With the Spring Festival falling on the same week in 2014, the low-base effect created by the holiday heavily distorted year-on-year results, with each city registering at least triple-digit sales spikes. Sales in Beijing and Shenzhen, for instance, were up 722% and 4,474% respectively on an annual basis.
Vanke Cautious on 2015, Jan Contracts Down 16% y-o-y
Earlier this week, Chinese property giant Vanke announced contracted sales of 23.21 billion yuan in January, down 7% month-on-month and 16% year-on-year respectively. In terms of area, the company reported sales of 1.96 million square-meters, down 5% month-on-month and up 1% year-on-year. Sales prices averaged out to 11,842 yuan per sqm, down 2% month-on-month and 12% year-on-year. Vanke, like many of its peers, has slashed prices over recent months to offload excess inventories. While announcing its January results, Vanke explained that market oversupplies would restrain the potential for industry upside this year despite expectations of supportive measures from financial authorities (see above).
Kaisa Stake Sale Expected to Avert Default
Tianjin-based developer Sunac China Holdings Co has agreed to purchase a 49.3% stake in embattled peer Kaisa Group. This news comes on the heels of Sunac's announcement that it would acquire ownership interests in 4 of Kaisa's projects in Shanghai in a separate deal valued at 2.4 billion yuan. Kaisa was thrust into the headlines after it failed to make a $20 million offshore bond payment scheduled for January 8. The company had a 30-day grace period on the overdue payment, which it will likely meet thanks to its restructuring deal with Sunac.
Lenovo Holds Top Spot in Global PC Market, Smartphone Sales Surge
According to tech sector researcher IDC, Lenovo shipped 59.23 million PCs in 2014, 10% more than in the previous year. These results cemented Lenovo's position at the top of the global PC market, where it accounted for 19.2% of all shipments last year, up from 17.1% in 2013. Lenovo's two closest competitors, HP and Dell, took market shares of 18.4% and 13.5% respectively.
Meanwhile, Lenovo's smartphone shipments – including shipments of its newly-acquired Motorola brand – reached 96.5 million units, up 65% year-on-year. This gave Lenovo, with Motorola, a 7.4% share of global shipments last year. The company trailed only marketplace leaders Samsung and Apple, which respectively commanded 24.5% and 14.8% of worldwide shipments.
NEA Aims for 15GW of New On-Grid Solar Installation in 2015
The National Energy Administration (NEA) wants 15 gigawatts of new solar capacity added to the country's energy grid this year, according to the terms of a recent draft. Specifically, this total would include 8 GW supplied by centralized power stations and 7 GW from distributed power stations (including at least 3.15 GW of rooftop capacity). Some 10.5 GW of new solar capacity were installed in 2014, short of the NEA's target of 14 GW that year.
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