New applications for RQDII program suspended

    CHINA’S central bank has suspended new applications for the Renminbi Qualified Domestic Institutional Investor (RQDII) investment program, sources with direct knowledge of the matter said.

    “Many Chinese institutions have made use of the RQDII channel to buy yuan bonds and certificate of deposits in the past two months,” said a source at a Chinese fund house, adding the program had now been suspended. The People’s Bank of China has alerted the custodian departments of commercial banks to stop handling any new RQDII business via window guidance, said another source at a domestic commercial bank.

    China Grand buys stake in Baoxin Auto

    AUTO dealership China Grand Automotive Services has bought a controlling stake in luxury car dealer Baoxin Auto Group for HK$8.2 billion (US$1.06 billion), the companies said Friday.

    China Grand, the country’s largest auto dealership group, paid HK$5.99 per share to buy a 53.6 percent stake in Baoxin with the purchase occurring Dec. 4, the companies said in filings to the Hong Kong and Shanghai stock exchanges. China Grand will also be able to acquire up to 75 percent of Baoxin, the country’s biggest dealer of BMW brand cars, for about HK$11.5 billion.

    Developer may default on bonds this week

    ORDOS City Huayan Investment Group Co., based in Ordos in the northern Inner Mongolia region, said uncertainty arose after bondholders opted for the early redemption of 1.14 billion yuan (US$176.7 million) in notes Thursday this week, according to a statement on the Chinabond website Friday.

    Erdos City Infrastructure Construction Investment Co., a local government financing vehicle in Ordos, provides a guarantee for the bonds, the statement said. Huayan said earlier this month that it needed to pay 1.05 billion yuan worth of principle and 94.56 million yuan in interest to bond investors Thursday this week.

    No near-term upside for stocks: Lygh Capital

    CHINA’S stock market won’t see much upside during the first half of next year as the nation’s reforms of initial public offerings will spur a new supply of shares and earnings growth will remain subdued, Singapore-base fund manager Lygh Capital said.

    “I am cautious about this new supply coming to the market,” said Grace Lu, managing director at Lygh and portfolio manager of the GH China Century Fund. “Stock markets will go sideways at best over the first half,” said Lu.