china rongsheng heavy industries group holdings free sample

HONG KONG (Reuters) - Shares in China Rongsheng Heavy Industries Group Holdings Ltdtumbled 18 percent on Monday after the U.S. securities regulator accused a company controlled by the shipbuilder"s chairman of insider trading ahead of China"s CNOOC Ltd"sbid for Canadian oil company Nexen Inc.Labourers work at a Rongsheng Heavy Industries shipyard in Nantong, Jiangsu province May 21, 2012. REUTERS/Aly Song

The U.S. Securities and Exchange Commission filed a complaint in a U.S. court on Friday against a company controlled by Rongsheng Chairman Zhang Zhirong, and other traders, accusing them of making more than $13 million from insider trading ahead of CNOOC’s $15.1 billion bid for Nexen.

On Monday, Rongsheng shares dropped as much as 18 percent to HK$1.15, a record low, leaving the company with a market capitalization of just over $1 billion. The company also issued a profit warning, saying first-half earnings would fall sharply as a result of a global shipbuilding downturn, a factor that has already pushed its shares down more than 75 percent in the past year.

Rongsheng - which entered a strategic cooperation agreement with CNOOC in 2010 - said in a Hong Kong filing that it did not expect the U.S. investigation to affect its operations. It said Zhang did not have an executive role in the company.

“The news around the chairman comes on the back of other operational and credibility issues,” Barclays said in a note to clients. “We think China Rongsheng presents significant company-specific risk.”

Zhang was ranked the 22th richest Chinese person by Forbes Magazine in September 2011. But his net worth fell by more than half in the past year to $2.6 billion in March 2012 as shares of Rongsheng tumbled.

Shares of Glorious Property Holdings Ltd, a Chinese real-estate developer in which Zhang has a 68 percent stake based on a December 2011 filing, also fell sharply. The stock fell as low as HK$1.12, down 15 percent from Friday.

CNOOC said on July 23 it had agreed to acquire Nexen for $15.1 billion, China’s biggest foreign takeover bid. Shares of Nexen jumped almost 52 percent that day.

The unnamed Singapore traders used accounts in the names of Phillip Securities and Citibank C.N, while Well Advantage made its trades through accounts held at UBS Securities and Citigroup Global Markets. Neither of the Well Advantage accounts had traded Nexen shares since January 2012, and the Citigroup account had been completely dormant for over six months, the SEC says.

HONG KONG, Nov 26 (Reuters) - China Rongsheng Heavy Industries Group, the country’s largest private shipbuilder, said its chairman had stepped down just three months after the company posted its sharpest fall in half-year net profit.

Listed in November 2010, Rongsheng was hit by an insider dealing scandal involving a firm owned by Zhang ahead of the $15.1 billion bid for Canadian oil firm Nexen Inc by China offshore oil and gas producer CNOOC.

Rongsheng said earlier this month that investment firm Well Advantage, controlled by Zhang, had agreed to pay $14 million as part of a settlement deal with the U.S. Securities and Exchange Commission (SEC).

In August, Rongsheng posted an 82 percent drop in half-year profit on a dearth of new orders and warned economic uncertainties would continue to weigh on the global shipping market.

Zhang Zhirong has also resigned as chairman of Glorious Property Holdings Ltd, the property developer said, as part of a series of executive changes at the company.

As part of the changes at China Rongsheng, the company said that Zhang De Huang was retiring and had resigned as an executive director and as vice chairman of the board.

China Rongsheng Heavy Industries Group Holdings Limited is an investment holding company. The Company has four segments: shipbuilding, offshore engineering, marine engine building and engineering machinery. The Company commenced the construction of its shipyard in Nantong, Jiangsu Province. As of December 31, 2009, the Company鈥檚 shipyard covers approximately four million square meters and occupies 3,058 meters of Yangtze River shoreline. The Company operates its marine engine building business through Rong An Power Machinery. In October 2009, Rong An Power Machinery delivered its marine engine product, a Wartsila 6RT-flex68D low-speed marine diesel engine. The Company through Zhenyu Machinery offers 16 varieties of hydraulic excavators and two varieties of hydraulic crawler cranes. Its products include bulk carriers, crude oil tankers, containerships, offshore engineering products, low-speed marine diesel engines and small to mid-size excavators and cranes for construction and mining.

Ch Rongsheng isa leadinglarge-scaleheavy industry enterprisegroup.It possesses of two manufacturing bases of shipbuilding and offshore engineering in Nantong of Jiangsu Province and diesel engine in Hefei of Anhui Province both approved by NDRC, coveringwide services ranging from shipbuilding, offshoreengineering,power engineering, engineering machineryandetc. Until Dec.With thevision of “cultivate world first-class employees and create world first-class enterprise”,the spirit of “integrity-based, the pursuit of excellence”, and the responsibility ofrevitalizingnational industry, it runs fast toward the great goal of world first-class diversified heavy industry group.

Both the recent China HSBC PMI (48.2 in June, down from 49.2 in May) – the details can be seen here (pdf), as well as the most recent trade data were plain bad. There is no sugarcoating this – the long range effects of many years of credit-bubble induced malinvestment are finally being felt, as China"s leadership has apparently decided to abandon or curb credit expansion somewhat before it creates a catastrophic crack-up boom.

The worsening trade data somehow – don"t ask us how – managed to "surprise" economists once again: “China Premier Li Keqiang repeated his commitment to steer clear of stimulus for the world"s second-largest economy, even as contracting exports added to fears of a slowdown.

China"s key export sector shrank 3.1% in June compared with a year earlier, down from 1% year-on-year growth in May and the first contraction in a non-holiday month since the height of the financial crisis in November 2009. Imports fell 0.7% year-on-year, pointing to weak demand at home as well as abroad.

The WSJ provided the following illustration, whichshows that China"s labor market apparently remains tight in spite of the recent slowdown, a fact that may embolden the leadership to hold off from providing “stimulus”.

To top off twoweeks of dismal data releases, it also was revealed that aboutone third of China"s shipyards is likely to go bankruptin coming years: “China, the world’s biggest shipbuilding nation, may see a third of its yards shut down in about five years as they struggle to win orders amid a global vessel glut, an industry group said. The yards in peril of closure have failed to get any orders “for a very long period of time,” Wang Jinlian, secretary general of the China Association of National Shipbuilding Industry, said in an interview yesterday. They may end operations in three to five years if the “gloomy market persists.” The nation has more than 1,600 shipyards.

China Rongsheng Heavy Industries Group Holdings Ltd. Fell the most in almost a year in Hong Kong trading today after saying it’s seeking financial support from the government and its largest shareholder amid a plunge in orders and prices. The stock of China’s biggest yard outside state control was halted yesterday after the Wall Street Journal reported it recently cut about 8,000 jobs.

“Because of the overall market, there’s no way out for the companies; so only the strongest will survive,” Sarah Wang, a Shanghai-based analyst at Masterlink Securities Corp., said. “Life for China’s shipyards will be tougher this year as any form of credit crunch is critical.”

This is not a big surprise, and it is actually good news, since obviously the 2002-2008 bubble has left the world with massive overcapacity in the ship building industry. The shipping industry has provided us with a textbook example of massive malinvestment in higher order goods industries as a consequence of an artificial credit boom. Interestingly, China"s stock market took all these news in stride and finally decided to rebound a bit:

Here is why the only surprise about the deterioration in China"s trade data was that it managed to surprise anyone. The government had previously declared a war on fake data, specifically fake export data, which previously masked the weakening of exports. "China’s crackdown on fake export invoices used to disguise money flows is probably cutting the nation’s trade figures, revealing subdued global demand that will weigh on economic growth.

“The crackdown from China’s foreign-exchange authorities on fake invoicing will bring the inflated export growth down to the real trend, which is single digits,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong, who projects export gains of 5 percent for May. More broadly, China’s economy “is weakening but is not collapsing,” said Zhang, who previously worked at the International Monetary Fund.”

We would point out that more accurate (or less fraudulent) data cannot possibly "weigh on economic growth". However, the fix may indeed help with "restoring trust". Why the chief central planner is supposed to shift economic activity in China "toward more consumption" is not quite clear to us, although everybody seems to be saying it. It is true that there has been a lot of capital malinvestment in China, but it doesn"t follow from this that China could improve its economic well-being by consuming more. One cannot get richer from consumption. The best thing the central planners could do would be to stop planning and interfering altogether and leave the economy to its own devices.

It is a relief to hear that the economy is not "collapsing", but who knows, this may well be a case of "not yet". The improvement in trade data collection evidently does not mean that any other economic data published by China have become more reliable or trustworthy. This brings us to our next point.

China is well known for providing the world at large with data that are widely considered especially dubious. Its latest decision is to no longer provide certain data at all, which suggests that they are about to worsen considerably. “China suspended the release of industry-specific data from a monthly survey of manufacturing purchasing managers, with an official saying there’s limited time to analyze the large volume of responses.

“We now have 3,000 samples in the survey, and from a technical point of view, time is very limited — there are many industries, you know,” Cai Jin, vice president of the China Federation of Logistics & Purchasing, which compiles the data with the National Bureau of Statistics, told reporters yesterday in Beijing.

The disappearance of data on industries including steel adds to issues hampering analysis of the world’s second-biggest economy, after fake invoices inflated trade numbers this year. Neither the federation’s nor the statistics bureau’s statement on the manufacturing Purchasing Managers’ Index this week gave readings on export orders, imports and finished-goods inventories or an explanation for the omissions.

China’s manufacturing weakened by more than estimated in July, according to a preliminary survey of purchasing managers that casts further doubt on the government’s ability to meet its annual economic growth target

China’s manufacturing weakened by more than estimated in July, according to a preliminary survey of purchasing managers that casts further doubt on the government’s ability to meet its annual economic growth target.

[np_storybar title=”Paul Krugman: China’s economy has hit its Great Wall” link=”http://financialpost.com/2013/07/20/paul-krugman-chinas-economy-has-hit-its-great-wall/”]All economic data are best viewed as a peculiarly boring genre of science fiction, but Chinese data are even more fictional than most. Read more.

The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, if confirmed in the final report Aug. 1, would be the lowest in 11 months. Readings below 50 indicate contraction. A separate euro-area gauge showed manufacturing unexpectedly expanded this month.

After facing down banks with a funding squeeze, China’s leaders yesterday pledged a five-year ban on construction of new office buildings for the government, the Communist Party and state enterprises. Premier Li Keqiang’s efforts to rein in credit, property prices, and officials’ extravagant spending risk worsening a slump even as state media say 7.5 percent growth is the lower limit for this year.

“The key thing now is confidence,” Qu Hongbin, HSBC’s chief China economist in Hong Kong, said on Bloomberg Television. “The confidence now is pretty weak both in the financial market and the corporate sector.”

Authorities signaled this week that they may protect growth of 7.5 percent this year and 7 percent in the future, stoking a China stock rally yesterday on speculation policy makers will boost spending on railroads and environmental gear to support the economy.

China’s economic slowdown has spurred forecasts for a government response. Bank of America Corp. sees a 150 billion yuan program of spending and tax incentives, Nomura Holdings Inc. is projecting cuts in lenders’ reserve requirements and Australia & New Zealand Banking Group Ltd. says authorities will reduce benchmark interest rates.

“The fall in the index is in line with our view of growth momentum fading further in the coming quarters,” Zhang Zhiwei, chief China economist at Nomura in Hong Kong, said in a note today. His estimate for today’s PMI was 47.5, the lowest in Bloomberg’s survey.

China banned government and Communist Party agencies from constructing new office buildings for five years and told them to suspend projects that have already won approval as the country seeks to cut wasteful spending. Agencies should ensure that limited government funds and resources are spent on developing the economy and improving the public’s well-being, according to a statement yesterday.

China Rongsheng Heavy Industries Group Holdings Ltd., the nation’s biggest shipyard outside state control, said this month it’s seeking financial help from the government as orders plunged.

The National Bureau of Statistics and China Federation of Logistics and Purchasing release their own PMI survey, with a bigger sample size, on Aug. 1. The official PMI in June was 50.1, down from 50.8 in May.

Japan today reported weaker growth in exports to China in June, a 4.8 percent gain from a year earlier after an increase of 8.3 percent in May, highlighting the potential for a Chinese slowdown to reverberate around the region. Figures on new-home sales and mortgage applications are due in the U.S.

China on July 20 eliminated the lower limit on lending rates offered by the nation’s financial institutions as economic growth slows and authorities expand the role of markets. The central bank acknowledged that it was a limited step and said that freeing up deposit rates would be more important.

China’s gross domestic product rose 7.5 percent in April- to-June from a year earlier, down from 7.7 percent in the first quarter. Growth was the slowest in three periods and extended the longest streak of sub-8 percent expansion in at least two decades.

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