This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.
Hello to our viewers all over China.
You're watching “Asia Market Daily”, co-produced by CCTV Business Channel and
CNBC, first in business worldwide.
I am Saijal Patel and here are the top stories across Asia today.
China was the main story in Asia today with markets seeking direction from GDP data and Agricultural Bank of China's Shanghai debut.
Overnight retail sales data from the US had failed to please.
The Federal Reserve's June meeting minutes showed policymakers still concerned over the economy.
That's put a drag on market sentiment, but China's double-digit growth data today provided some comfort, despite signs of a mild slowdown from last quarter.
Q2 data came in just below forecast, rising 10.3 percent from a year ago.
Here's what one analyst thinks.
(SOT) Qing Wang, Chief economist for Greater China, Morgan Stanley:
“Economic slowdown is underway, but that is not a surprise. And at the same time, this is not a hard landing or a sharp slowdown of the economy, and the key message from the data release will be inflation pressure is definitely easing, and this opens room for potential policy shift.”
So here's how the trading day ended, Japan's Nikkei down more than a percent, slipping from earlier 3-week highs.
Others like Australia, South Korea and Taiwan also ended the day slightly in the red.
Over in China and Hong Kong, a lackluster performance, given that the big story of the day – the Agricultural Bank of China's Shanghai debut failed to impress.
Still, the weakest of China's big 4 bank managed to put together a $22.2 billion listing.
CNBC's Emily Chan explains how.
The Agricultural Bank of China is the mainland's largest bank by branches, boasting some 24,000 outlets, serving more than 320 million customers. Its mandate to support rural development and financing left it awash with bad debt and a reputation as the weakest of the country's major banks. But ironically these same loans could prove a boon going forward.
(SOT) Mark To, Head of Research, Wing Fung Financial:
“We can see that in county areas, the NPL problem is more serious. But given the growing economy and especially the support from the mainland government, we can see that all these village and small cities and also county areas will show very high growth compared to the urban areas. I think that may substantially improve its profitability and efficiency.”
High risk rural lending makes up more than a quarter of AgBank's revenues, but analysts believe ABC will benefit from China's next wave of growth, as Beijing looks to boost growth in the central and western parts of the country.
(SOT) Aaron Boesky, CEO, Marco Polo Investments:
“They're the viewed as the lowest quality, or the worst of the major state owned banks. And because of that they've a lot of room to grow in terms of their image and product line. A lot has opened up in china, as you already know, in terms of the credit markets, credit card issuance, regulations on second and third mortgages and housing, there's a lot of openings right now for banks to step forward, be more innovative with their product lines.”
The bank attracted at least 27 strategic investors in the A-share portion of its IPO, including China Life Insurance and China Railway Investment.
And close to a dozen of its overseas counterparts backing the HK portion, Rabobank and Standard Chartered. And the sovereign wealth funds of Qatar, Kuwait and Singapore.
But the ability for ABC to pull off this IPO wasn't so much a reflection of the strength of the bank, but a shift in investor sentiment towards China's growth story.
(SOT) Aaron Boesky, CEO, Marco Polo Investments:
“What we will see is for every billion dollars that these banks raise, you'll probably see 5 to 10 billion new loans over the course of the next 12 months. So it's actually a very bullish indicator for the next 12 months of economic forecasting in China.”
Moody's believes ABC's Core capital adequacy ratio will rise to more than 10 percent after the IPO. But with ongoing concerns over the impact of bad loans, packing profits may not be as easy as ABC. Emily Chan, CNBC Hong Kong.
Let's check out AgBank's Shanghai debut today.
Shares opened up 1.1 percent
With its Hong Kong listing tomorrow, the total sales of A and H shares will total $19.3 billion
That's still slightly below ICBC's almost $22 billion debut in 2006.
However, if AgBank decides to exercise their over-allotment option — it'd take them to 22.2 billion, which would make AgBank the world's largest IPO to date.
By China standards, AgBank's listing today was subdued at best.
Here's how it compares to its peers when they listed.
ICBC, the world's largest IPO to date jumped 5 percent when it debut.
In Hong Kong for example, it was reported that 1 in 7 of Hong Kong's total population placed orders for its retail portion.
Others like Bank of China, China Construction Bank and Bank Of Communications also shone.
BoComm of course topping the chart with a 71 percent gain when it listed in 2007.
Let's take a look at who's funding the listing.
In terms of institutional demand, investors from Asia made up the bulk of subscriptions at 45 percent.
US investors took up 30 percent of the institutional portion and Europe made up the rest.
Despite the slow start, some analysts are saying that AgBank is still worth betting on...
(SOT) Yang Liu, Co-Chairman, Atlantis Investment Management:
“The Agricultural bank is not a normal bank. It is tapped into the china vast rural china's growth. On the other side, you know, we all expect further improvement in terms of the costs basis. That’s the cost to income ration. I guess there's 20% to 30% room to improve. On the other side, we believe the agricultural sector is going to take off, that's what investors want to see going forward so we are buying the agricultural sector plus the agricultural bank it is gateway for that.”
And while some analysts predict that many retail investors may rush to take profits in the coming days, Martin Hennecke of Tyche Hong Kong says the agricultural sector is a long-term play.
(SOT) Martin Hennecke, Associate Director, Tyche:
“I mean, they've come a long way, to improving the bad debt ratio. They’re a lot more healthy. Some have been saying, you know, it's rural agriculture, but agriculture may not be the worst sector going forward. We’ve just seen the grains storing up, and we think that the agricultural sector generally is one of the most undervalued and the highest upside potential, so we're quite positive on this, and positive on China, the renminbi, and even the rising labor costs.”
Well, that wraps up today's business highlights.
I'm Saijal Patel from CNBC - first in business worldwide.
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