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Summary of the Document

Core Content

The document presents a market report from 18 March 2014, focusing on the Mobile Payment Industry in China and related financial market data. It discusses the temporary suspension of mobile internet payment products by the People's Bank of China (PBOC) for Tencent and Alibaba due to security concerns, and provides stock market performance, commodity prices, currency rates, interest rates, and bond yields across various regions, including Hong Kong, China, Asia, and the US/Europe.

Main Points

Mobile Payment Industry in China

• PBOC Action: The PBOC temporarily suspended mobile internet payment products from Tencent and Alibaba due to customer security concerns. This move caused a significant drop in related stock prices, as the market feared potential prohibition.
• Regulatory Intent: The temporary halt aims to regulate the mobile payment industry, protect consumer interests, and strengthen supervision of online financial products, but it does not imply a ban.
• Industry Growth: Mobile payment is expected to grow as a mainstream payment method in China, with a focus on micro-payment and electronic coupons.
• Market Challenges: The industry faces lack of policy support and standard alignment across different players, which hinders the value chain.
• Need for Coordination: A third-party platform is believed necessary to coordinate the interests and technical/service standards among various stakeholders.
• Key Players: Alipay (Alibaba), Tenpay (Tencent), and China UnionPay (CUP) are the leading third-party payment providers in China, partnering with major e-commerce platforms like Taobao, Tmall, and 360Buy.
• Technological Development:
  • In April 2011, UC and Alipay launched the first mobile payment solution.
  • In October 2011, Alipay introduced bar-code payment for in-store transactions.
  • In September 2012, Tencent integrated Tenpay into WeChat to expand its mobile payment platform.

Market Performance

• Stock Indices:
  • Hang Seng Index (HSI): Closed at 21,474 with a -0.3% change.
  • H-share Index: Closed at 9,333 with a +0.4% change.
• Turnover:
  • HK mainboard turnover: 55.8 billion HKD.
  • HSI stocks to market turnover: 36.2%.
  • CBBC + warrants: 18.8% of total turnover.
• Equity Indices (China, Asia, US/Europe):
  • CSI 300 Index: Closed at 2,143 with a +1.0% change.
  • Shanghai Composite Index: 7,341 with a +1.4% change.
  • Nikkei 225: 14,278 with a -0.3% change.
  • DJIA: 16,247 with a +1.1% change.
  • S&P 500: 1,859 with a +1.0% change.
  • NASDAQ: 4,280 with a +0.8% change.

Key Financial Indicators

Commodity Prices

• WTI Oil: 98.1 USD/bl, -0.8% change.
• Gold: 1,371.5 USD/troy oz, -0.4% change.
• Copper: 6,469 USD/metric ton, no change.
• Aluminum: 1,740 USD/metric ton, no change.
• CRB Index: 301.0, -0.6% change.
• Baltic Dry Index: 1,481.0, +0.3% change.

Currency Rates

• CNY: 6.1775, +0.02% change.
• Rmb NDF 12-mth: 686.6875, -0.13% change.
• CNH: 6.1604, -0.02% change.
• HKD: 7.7667, +0.01% change.
• USD Trade Wgt Index: 76.7961, -0.27% change.
• Euro: 1.3922, -0.28% change.
• GBP: 1.6637, -0.26% change.
• Yen: 101.7700, +0.31% change.
• AUD: 0.9087, +0.56% change.
• NZD: 0.8565, +0.59% change.
• CHF: 0.8733, +0.40% change.
• CAD: 1.1052, +0.00% change.

Interest Rates

• HIBOR 3-mth: 0.38%, +0.001% change.
• USD LIBOR 3-mth: 0.23%, -0.000% change.
• SHIBOR 3-mth: 5.500%, +0.000% change.

Bond Yields

• US Treasury Yield (3-mth): 0.05%, no change.
• US Treasury Yield (10-yr): 2.69%, +0.038% change.
• China Treasury Yield (2-yr): 3.600%, no change.
• China Treasury Yield (10-yr): 4.450%, no change.

ADR and H-Share Data

• ADR vs. HK Close:
  • HSBC: 0.09% premium.
  • China Mobile: 1.01% premium.
  • China Life: 0.47% premium.
  • CNOOC: 0.30% premium.
  • PetroChina: 0.58% premium.
  • Sun Hung Kai: 0.02% premium.
  • Cheung Kong: 0.23% premium.
  • Hutchison Whampoa: 0.42% premium.
  • China Telecom: 0.16% premium.
• ADR Turnover:
  • HSBC: 512.7 million HKD.
  • China Mobile: 505.7 million HKD.
  • China Life: 51.0 million HKD.
  • CNOOC: 104.2 million HKD.
  • PetroChina: 175.4 million HKD.
  • Sun Hung Kai: 0.1 million HKD.
  • Cheung Kong: 2.4 million HKD.
  • Hutchison Whampoa: 3.9 million HKD.
  • China Telecom: 9.7 million HKD.

Key Takeaways

• The mobile payment industry in China is undergoing regulatory scrutiny due to security concerns.
• Regulation is expected to evolve, aiming to enhance the industry's stability while supporting innovation.
• Stock market performance reflects concerns over the PBOC's actions, with related stocks experiencing sharp declines.
• The growth of mobile payments is anticipated, with micro-payment and electronic coupons becoming more prominent.
• Third-party platforms are seen as crucial for coordinating standards and enhancing consumer trust in the sector.
• Financial market indicators show mixed performance, with some indices rising and others falling, reflecting the broader economic environment.