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3 Must Read Asian Market Stories: China's Central Bank Balance Sheet Won't Shrink Soon, Bitcoin Soars Above $3,000, and Why SEA Ltd Is Planning An IPO In New York -- Barron's Blog

12 Jun 2017 12:38 am

By Robert Guy

The pace at which the world's leading central banks will shrink their balance sheets has come into sharpened focus, but it seems investors don't have to worry yet about China pulling in the reins.

Bloomberg has an interesting story looking at the People's Bank of China's balance sheet and how many market experts reckon it could expand further. Here's a little taste:

Whereas the Federal Reserve's $4.5 trillion asset pile is set to be shrunk and the European Central Bank's should stop growing by the end of this year as the outlook brightens, China's $5 trillion hoard is here to stay for the time being -- and could even still expand, according to the majority of respondents in a Bloomberg survey of People's Bank of China watchers.

The PBOC balance sheet is a fundamentally different beast from its global peers -- run up through capital inflows and trade surpluses rather than hoovering up government bonds -- but it still matters for the global economy. Changes in the amount of base money in the world's largest trading nation are having a bigger impact than ever, making the variable key for stability in a year when political transition in Beijing is in the cards.

"China is more than a couple of years away from balance-sheet contraction," said Ding Shuang, chief China economist at Standard Chartered Plc in Hong Kong, pointing out that the growth in the broad money supply is still behind the government's target.

Bitcoin's red-hot run continues, with the digital currency powering through $3,000. Here's CNBC with the details:

Bitcoin traded above $3,000 for the first time on Sunday, continuing this year's massive surge and helped by increased demand from Asia-based investors.

After trading in a range for the last week, bitcoin climbed to an all-time high Sunday of $3,012.05, according to CoinDesk.

On Chinese exchanges such as BTCC, the currency traded about $40 to $60 above that price. Last week, several major Chinese bitcoin exchanges allowed customers to resume withdrawals of the cryptocurrency, after halting withdrawals in early February amid scrutiny from the People's Bank of China.

Asia's e-commerce platforms were in the spotlight last week thanks to Alibaba's two day investor meeting, but it won't be long before U.S. investors will have another e-commerce play to focus on. The South China Morning Post has a story about how Southeast Asian e-commerce and gaming platform SEA Ltd, which is based in Singapore, is preparing for a $1 billion IPO in New York. Here's a glimpse of the story:

Sea Ltd, Southeast Asia's most valuable start-up, is prepping for a US$1 billion initial public offering in the United States, a move that would be a major pivot for Southeast Asia's rapidly expanding tech industry.

The online gaming and e-commerce company, formerly known as Garena, has filed for a listing with the US Securities and Exchange Commission, according to a recent report by Bloomberg. The Singapore-based company has appointed Goldman Sachs to be its lead adviser and it could list as early as 2018. A representative with Sea declined to comment on the rumoured IPO.

Sea is one of the region's few unicorns, a tech business valued over US$1 billion. It recently secured US$550 million in a new funding round from some of Asia's biggest conglomerates.

These included GDP Venture, a venture capital firm in Jakarta founded by Martin Hartono, son of Indonesia's richest tycoon R Budi Hartono.
 More at Barron's Asia Stocks to Watch blog, http://www.barrons.com/asia-stocks-to-watch 

(END) Dow Jones Newswires

June 11, 2017 20:38 ET (00:38 GMT)

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