Policy
CSRC signed MOU Regarding Securities and Futures Regulatory Cooperation with Dubai Financial Services Authority (DFSA), Irish Financial Services Regulatory Authority (IFSRA) and Austrian Financial Market Authority (FMA) on September 27, October 23 and October 30 2008 respectively. Up to date, CSRC has signed 43 MOUs with securities and futures regulators in 39 jurisdictions around the world. Hence, investors from these regions can invest in China's capital market through QFII, conversely, domestic investors can also make investments in the aforementioned markets through QDII. (Shanghai Securities News)
Large scale enterprise groups will no longer be able to pay their income taxes on a consolidated basis starting Jan 1, 2009, according to SAT.(Shanghai Securities News)
Economy
In September, the growth rate of value added of the industrial enterprises above the designated size dropped to 11.4 percent, the lowest since April 2002.(Shanghai Securities News)
NDRC announced a three year quake reconstruction plan costing RMB1tn that aims to raise industrial development above pre-quake levels.(Shanghai Securities News)
It is said that Ministry of Transportation is planning a RMB5tn infrastructure investment plan for the coming 3-5 years.(Sina)
Market
PBoC reduces the supply of central bank notes. 3M and 1Y central bank note will be issued biweekly instead of weekly. (Shanghai Securities News)
RMB exchange rate to USD rose 21bp yday.(Shanghai Securities News)
Sector
Deputy Governor of MoII Mr. Hou expressed yday that China’s overall national policies maintained the supporting to the coal chemical industry’s development, and the drop of crude oil is temporary. (China Securities Journal) 
Cooking oil price saw substantial decline since 2H08. Insiders believed cooking oil market may recover on the rest of year due to the coming of traditional peak season. But long-term outlook is still not optimistic. (China Securities Journal) 
Steel-Government is considering investigating the steel industry and considering increase the export tax rebate of high-end steel products. (China Securities Journal) 
China petroleum and chemical sector saw total sales at RMB4.9tn, up 31.5% YoY, profit expected at RMB418.7bn, up 3.4% YoY, among which chemical sector profit up 31.0%, oil &gas exploration up 53.4% YoY and oil refining sector loss RMB120bn+. China Petroleum and Chemical Industry Association (CPCIA) expects China petroleum and chemical sector sales and NI to grow 26% and 6% YoY respectively in 2008. Import &export and FAI expects to grow 35% and 30% YoY in 2008.(Shanghai Securities News)
NDRC announced that the minimum purchase price of the white wheat, the red wheat and mix wheat per jin will be raised to 0.87 Yuan, 0.83 Yuan and 0.83 Yuan respectively, up 13%,15.3% and 15.3%.(Shanghai Securities News)
Company
Panzhihua New Steel & Vanadium (000629.CH) publishes its plan of two cash options. The first cash option is RMB9.59/share. Investors giving up the first option will have the second cash option of RMB10.55/share after two years.
Sinopec (600028.CH) plans to cut down output to cope with demand slowdown, according to its investor conference recently.
Haima (000572.CH) will reduce conversion price of its convertible bond to RMB3.60/share from RMB5.03/share as its stock price has fallen under RMB3.0 recently.
China Netcom has acquired 57% stakes of PCCW (0008.HK), a Hongkong listed telecom service provider. However the two parties haven’t disclosed this deal officially.
Research Reports by Haitong
002234. CH Minhe Animal Husbandry-(NEUTRAL)–Downgrade to Neutral, chick price hurt by egg scare rapidly
By-DING Pin (dingpin@htsec.com)
Egg scare spreading to chickens;
Chick price falls rapidly;
We expect the company will suffer loss of RMB 20 million in 4Q08.
Sugar-(Neutral)-How to defense a cold winter of sugar market
By-DING Pin (dingpin@htsec.com)
Sugar output in grinding season of 08/09 against 07/08: equivalent or lower;
Sugar supply reached 15,300,000-15,800,000 ton in new season;
Influenced by poison milk powder event, we expect sugar consumption in 08/09 to be 14,500,000 ton;
Sugar price to be gloomy in 4Q08.
A share Market Re-cap
SHCOMP index up 53.91 points(+3.16%) to 1760.61, volume at RMB35.77bn
SZCOMP index up 196.97 points(+3.47%) to 5865.78, volume at RMB13.78bn
CSI300 index up 63.66 points(+3.91%) to 1691.42, volume at RMB31.5bn