Chinese stocks fell sharply on Tuesday. The catalyst was a call by bank regulators to raise more capital. Chinese banks will be required to raise $43 billion in new capital. Regulators have asked big banks to formulate plans for raising this new capital.

Bank lending in China surged this year, with some of this capital fueling the surge in Chinese stock prices. The Shanghai Composite hit a three-month high on Monday, up 77% for the year.

Continue reading Chinese stocks plunge on call for banks to raise capital

Chinese stocks plunge on call for banks to raise capital originally appeared on BloggingStocks on Tue, 24 Nov 2009 10:50:00 EST. Please see our terms for use of feeds.

As bad news mounts and fears grow about the impending recession, stock markets dropped around the world in Monday trading. Adding to the woes, analysts expect that the Bank of China may have to write off at least 25% of its $8 billion [subscription required] mortgage securities holdings in the U.S. Prior to these reports, the bank had only admitted to the need for a $322 million provision for losses, according to today's Wall Street Journal.

Europe's Dow Jones Stoxx 600 Index took its steepest fall since its Sept. 11, 2001 tumble, dropping 4.2%. Since it reached its 6 1/2 year high in June, the index has dropped 22%. A drop of more than 20% puts this market officially into bear territory.

Other key losers today include:

• France's CAC 40 lost 5.1%
  
• UK's FTSE 100 dropped 4%
• Germany's DAX went down 5.9%
• MSCI Asia Pacific Index lost 3.7% and the MCSI Emerging Markets Index fell 5.1%
• Hong Kong's Hang Seng Index gave up 5.5%
• Japan's Nikkei 225 Stock Average lost 5.1%

With this type of global bloodbath, expect U.S. stocks to tank when they reopen tomorrow. They are closed today for the holiday. Investors are seeking safe havens in bonds and currencies.

Lita Epstein has written more than 20 books including "Trading for Dummies."

Worldwide stock markets decline originally appeared on BloggingStocks on Mon, 21 Jan 2008 10:10:00 EST. Please see our terms for use of feeds.

The former CEO of Goldman Sachs, Henry M. Paulson, made about 70 trips to China during his tenure. Even as Secretary of Treasury, he is still traveling to China.

And, it's paying off big time.

It gave his company an opportunity to invest in China's mega bank IPO, Industrial & Commercial Bank of China Ltd. (ICBC). According to a report from Bloomberg, Goldman Sachs shelled out $2.6 billion for 5% of the company early this year. The profit on the deal is about $4 billion, which is the largest payday for the firm - ever.

OK, there are some major restrictions, such as that Goldman cannot sell any shares for three years. Also, there are political considerations (it would not look cool if an American investment bank started to dump shares).

But, then again, Goldman's investment is more than just making money. It should allow the firm to gear up for more investment banking business in fast-growing China.

It's also a sign that Goldman is much more than an advisory firm. It is becoming an investor. As seen recently, the firm is quite savvy at this. Look at another major deal Goldman struck in Japan, making about a $3.7 billion profit from its $1.28 billion investment in Sumitomo Mitsui Financial Group Inc.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Goldman China deal: $5 billion profit in six months originally appeared on BloggingStocks on Tue, 24 Oct 2006 11:14:00 EST. Please see our terms for use of feeds.