China Regulators Give Green Light to IPOs

Chinese stock investors are anxiously awaiting new initial public offerings (IPOs) in the coming month, after securities regulators recently signaled that they think the time is right to allow companies to raise capital in the market again. In China, companies need to obtain the green light from the China Securities Regulatory Commission (CSRC) before they can proceed with IPOs. That green light was switched off last September, after the Shanghai Composite Index had plunged 60% from the beginning of the year. Regulators believed that they had to take action to halt IPOs because battered investors were no longer able or willing to absorb new stock offerings. It was the seventh time in the 20-year history of the Chinese stock market that regulators decided to suspend IPOs. Previous suspensions lasted from two months to a year.

When the door swings open again for IPOs, there will be 33 firms eagerly waiting for their turn to debut on the stock market. According to the CSRC Web site, these companies had all passed the regulatory scrutiny already. Collectively, they expect to raise an estimated total of CNY 70 billion ($10 billion) through IPOs. Among them, China State Construction International Holdings and Sichuan Express are already listed on the Hong Kong Stock Exchange.

Market Recap
The Chinese stock market continued the upward trend this week, as optimistic forecasts that the Chinese economy is well on track to recovery this year more than offset statistics indicating declining power consumption and sluggish industrial activities. In a three-day trading week shortened by public holidays, the Shanghai Composite Index rose by 1.4% to 2,632 while the Shenzhen Composite Index rose by 0.6% to 10,128.

Macroeconomic News
Hong Kong Announced More Economic Stimulus Plans
An additional $2 billion worth of stimulus plans were announced this week in Hong Kong to help businesses and residents tackle the global economic crisis that has led to steep trade declines and rising unemployment in this financial and business trading center. The Hong Kong government unveiled a stimulus plan in February, but it had to raise the amount of financial support following a recent forecast that the local economy will contract by about 6% in 2009, the first full-year decline since the Asian financial crisis.

Technology
HTC to Supply Android Phones in China Starting June
The smartphones, based on  Google's (GOOG) Android mobile operating system, will be available to Chinese consumers through  China Mobile , according to the CEO of HTC, a Taiwanese smartphone maker. China Mobile has had lengthy discussions with  Apple (AAPL) to introduce its iPhone into China, but the two sides reportedly could not agree on the profit-sharing or subsidy plans for those phones. Some industry observers now believe that Apple is seeking to work with another Chinese operator,  China Unicom , to bring its smartphones into China.

Consumer
Gome Discloses Plans to Sell Stakes to Private Equity
China's largest electronics retail chain Gome this week admitted that it is in negotiation with private investors to sell part of the company, according to a filing with the Hong Kong Stock Exchange. The firm has been hit by the recent economic slowdown and by the arrest of its founder and ex-chairman Huang Guangyu. Rumored buyers of the Gome stakes include private equity firms Bain Capital, KKR, and Warburg Pincus.

Haier Bought 20% Stake in New Zealand Household Appliance Maker Fisher & Paykel
With this $50 million deal, Haier has become Fisher & Paykel's largest shareholder and will gain exclusive right to sell the firm's high-end appliances in China. The firm also expects to learn from Fisher & Paykel's branding and global marketing strategies to help it grow business internationally. Haier has had several unsuccessful attempts in recent years to acquire overseas assets.