China relaxes constraints on the Yuan
Posted on June 20, 2010 at 20:00 PM EDT
China's central bank announced late on Saturday it was ready to make the yuan more flexible. The yuan climbed as high as 6.8015 against the dollar, or up 0.38 percent, its strongest level since July 2005. On Sunday, Beijing ruled out a one-off move, saying there was no basis for any big appreciation and that it will keep the exchange rate at a basically stable level. The Chinese move on the yuan will help to cool off its economy’s growth and it will boost the US, European manufacturers and exporters as they could be more competitive selling their products in China. The appreciation in the yuan will also have a negative effect on retailers as the China's imports would become more expensive. That could cut into earnings, especially since weak consumer spending limits' stores ability to pass higher prices on to their customers. The global stock markets rallied early on today’s trading session on the appreciation of the yuan, but as investors went into details the excitement soon faded. Investors realized that the gain in the yuan would boost the global economy gradually rather than in a short term, as a result major US stock indices dropped in a late-day again. The China 100 stock index won 0.55% to 874.83. The Panda China Large Cap Stock Index gained 24.87 points or 2.51% to 1015.09. The Tiger China Small & Mid Cap Stock Index won 0.39% to close at 867.20 and the Dragon China Undervalued Stock Index lost 1.86% to close at 738.02. Netease.com Inc. ( NTES ) shares closed at 33.33 with a gain of 2.98 points or 9.82% to be today’s top gainer. Netease.com operates an interactive online community in China, and provides Chinese language content and services through online games, Internet portal, and wireless value-added services [WVAS] businesses. Ctrip.com International Ltd. ( CTRP ) [45.80, 3.25, +7.64%] gapped up and gained almost 8% in more than double its average volume. Approximately 4.6 million shares have traded hands today vs. average 30-day volume of 2.2 million shares. The9 Limited ( NCTY ) [4.07, 0.26, +6.82%] an online game developer and operator in China recently announced that Diego Armando Maradona, Argentine super soccer star, endorses The9's proprietary online game entitled "Winning Goal". Winning Goal is a competitive soccer game. The9 has launched the game in both web version and the SNS version for gamers around the world. China Unicom [Hong Kong] Limited ( CHU ) [13.36, 0.80, +6.37%] a leading Chinese mobile carrier, swelled 1.023 million to 6.528 million in May 2010. From November 2009 to January 2010, the 3G-user growth of the company was faster compared to its 2G users, reaching 801,000; 920,000 and 853,000 respectively in the three months. Analysts believe that the 3G-user growth of China Unicom in May resulted from the company's adjustment of its operating strategy, namely, service packages, monthly subscription fees of wireless network access cards and charges for iPhone. China Armco Metals, Inc. ( CNAM ) [3.88, 0.23, +6.30%] announced last Thursday that it entered into a Guaranty Cooperation Agreement with Henan Chaoyang Steel Co., Ltd., a related party, in order to provide additional liquidity to meet its anticipated capital requirements to fuel the expected growth of its recently launched scrap metal recycling facility and the expansion of its metal ore trading business in the coming years. Under the terms of this guaranty, Henan Chaoyang agreed to provide unlimited joint guarantees to its subsidiary, Armet (Lianyungang) Renewable Resources Co., Ltd., for up to five (5) years. Yayi International ( YYIN ) [1.65, 0.25, -13.16%] last Thursday announced that it will report financial results for the transition period from November 1, 2009 to March 31, 2010 on June 29, 2010. The five-month transition report follows a change in the Company’s fiscal year end earlier. On March 26, 2010, Yayi International changed its fiscal year end from October 31 to March 31 to devote time and resources to operations during the peak season for sales in the fourth quarter of the calendar year and to focus on annual budgeting and audit preparations during the first quarter of the calendar year. China Organic Agriculture ( CNOA ) [0.58, 0.04, -6.45%] announced a week ago that Counsel for the Company and counsel for the Plaintiff Class had entered into a Stipulation and Agreement of Settlement which has been submitted for approval by the Court. Under the terms of the settlement, eligible class members would receive a total of $300,000 in cash together with shares of its common stock having a value of $300,000 in exchange for a release of claims which class members have or may have against the Company, its directors, officers, affiliates, shareholders and agents, except claims arising out of or related to the settlement. CDC Corp. ( CHINA ) [2.19, 0.12, -5.19%] recently announced that based on preliminary financial projections and estimates, the company expects second quarter 2010 application sales to be in the range of about $10.2 million to $10.9 million, an increase of approximately 33% to 42% compared to $7.7 million in the second quarter of 2009, primarily due to increased new logo sales for its on-premise solutions, and expanded cloud sales as a result of acquisitions, investments and organic growth.
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