China markets team leader, senior correspondent, Shanghai, China
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Sep 21, 2014

Short sellers target China, this time from the shadows

HONG KONG, Sept 22 (Reuters) – Short-sellers who profit from
stock price declines have resumed targeting Chinese companies
after a three-year lull, but many of the researchers who
instigate the strategy are now cloaked in anonymity, shielding
themselves from angry companies and Beijing’s
counter-investigations.

Three reports published this month separately accused three
Chinese companies – Tianhe Chemicals, 21Vianet
and Shenguan Holdings – of business or
accounting fraud. All three companies said the allegations were
baseless but their shares were hit by a wave of short-selling by
clients of the research firms and then by other investors as the
reports were made public.

Sep 12, 2014

Selective stock rally suggests lack of confidence

SHANGHAI, Sept 12 (Reuters) – The recent rally in Chinese
stocks has many investors hoping it is the start of a bull
market in the region’s worst performing market, but the
structure of fund flows suggests it is bargain hunting rather
than a lasting vote of confidence.

Money has flowed into mid-cap non-ferrous and defence
stocks, which were previously among the most discounted, yet
little has gone into banking and financial stocks, which are the
ones that will bear the brunt of any economic slowdown if it
comes.

Sep 11, 2014

China’s Tianhe denies overstating profits, cites investor support

SHANGHAI/HONG KONG (Reuters) – Tianhe Chemicals (1619.HK: Quote, Profile, Research, Stock Buzz) has denied allegations that it made false statements in its initial public offering prospectus and said key investor Morgan Stanley Private Equity Asia (MSPEA) has given it full support.

A report by Anonymous Analytics, which describes itself as a “faction” of the hacker group Anonymous, accused the Chinese chemicals company of conducting “one of the largest stock market frauds ever conceived,” based on analyses of different company reports, tax statements, market analysis and visits to customers mentioned in Tianhe filings.

Sep 11, 2014

China August inflation cools more than expected, gives room for more stimulus

BEIJING, Sept 11 (Reuters) – China’s consumer inflation
cooled more than expected in August, further evidence that the
economy is losing momentum, but economists are divided over
whether Beijing will use the extra room to announce fresh
stimulus measures.

The consumer price index (CPI) rose 2.0 percent in August
from a year earlier, the National Bureau of Statistics said on
Thursday, missing market expectations for 2.2 percent and down
from 2.3 percent in July.

Sep 10, 2014

Cost of shorting China’s Tianhe climbs after critical report

SHANGHAI, Sept 10 (Reuters) – The cost of borrowing shares
in China’s Tianhe Chemicals has risen since an
equities research house alleged last week that the company
cooked its books, suggesting the report was gaining traction
with investors.

Trading in Tianhe shares is halted at the firm’s request as
it prepares a statement denying the allegations, but those who
own shares can still loan them to short sellers betting the
price will fall.

Sep 3, 2014

Anonymous research firm says targeted China’s Tianhe for public good

SHANGHAI, Sept 2 (Reuters) – Secretive stock research firm
Anonymous Analytics, which has publicly accused China’s Tianhe
Chemicals of falsifying financial statements, said it
published the report for the public good, not money.

“We do not profit in any way from a decline in Tianhe’s
share price. We have no financial incentive linked to Tianhe’s
stock performance,” Anonymous wrote in an e-mail response to
Reuters, adding that it published the report because it was “the
right thing to do.”

Sep 2, 2014

Tianhe Chemicals share trading suspended on short-seller report

HONG KONG/SHANGHAI, Sept 2 (Reuters) – Trading in shares of
Tianhe Chemicals Group Ltd was suspended in Hong Kong
on Tuesday following a steep drop in the stock after research
firm Anonymous Analytics released a report on Monday alleging
fraud at the company.

The report alleged that Tianhe, which listed on the Hong
Kong stock exchange in June for $654 million, generates only a
fraction of the revenue that it claims.

Sep 1, 2014

China’s parliament authorises local governments to issue bonds

SHANGHAI (Reuters) – China’s parliament has formally approved changes to the budget law allowing local governments to issue bonds directly, a reform that could help stabilise government financing by creating the country’s first municipal bond market.

Regulators have already experimented with allowing local governments to issue debt directly through a pilot programme under way. The amendment to the budget law that the National People’s Congress passed on Sunday would certify the pilot and provide a legal basis for later expansion.

Aug 28, 2014

Productivity goes negative as China slips toward middle-income trap: study

SHANGHAI (Reuters) – Chinese productivity growth has gone into reverse for the first time since the Cultural Revolution tore the country apart in the 1970s, according to a new study, highlighting the failure of recent reforms to set China on a sustainable development path.

That means that despite dramatic rises in the cost of labor, energy, credit and property, the average Chinese company has actually been getting less bang for its buck since the global financial crisis – a classic sign of the “middle income trap” that many other emerging economies such as Brazil or Malaysia have found themselves stuck in after promising starts.

Aug 26, 2014

China foreign investment pattern changes as challenges grow

SHANGHAI (Reuters) – China’s foreign investment mix is changing, with portfolio investors buying more stocks but foreign direct investment falling to a two-year low on a slowing economy, rising business costs and anti-monopoly probes and crackdowns on foreign firms.

Foreign direct investment (FDI) in China fell in over the first seven months of 2014 compared with a year earlier, while the offshore funds flowing into mainland stocks hit the highest in more than two years last month.

    • About Pete

      "Pete Sweeney is Senior Markets Correspondent at Reuters, focused on bond, forex, interbank and equities markets. Previously editor of China Economic Review, a Hong Kong-based monthly magazine focused on providing news and analysis on the mainland economy. Sweeney came to China as a Fulbright scholar in 2008, and conducted research on Chinese business policy in Hangzhou, Harbin and Chengdu. He has also lived and worked in Belgium, Ecuador and the U.S. He speaks Chinese, at the expense of his Spanish."
      Joined Reuters:
      March 2012
      Languages:
      Mandarin, Spanish
      Awards:
      Fulbright Scholar
      Foreign Languages and Area Studies Scholar
      Boeing Merit Award
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