Last month, the Bank of China warned that the virtual currency was “not a currency in the real meaning of the word,” barring banks from issuing accounts denominated in Bitcoin. Chinese regulators urged businesses to stop working with Bitcoin exchanges in China.
Now, Alibaba, a leading Chinese online marketplace for everything from odd lots of motorized scooters to truckloads of packing peanuts, announced this week it would ban Bitcoin from its site.
Why China is cracking down on Bitcoin
The press releases may seem mundane, but the reality is, China has a big incentive to keep Bitcoin out of the hands of its citizens. China maintains very tight capital controls, limiting the amount of cash citizens can move outside the country.
Bitcoin effectively circumvents any and all capital controls. Prior to a widespread ban, Chinese citizens could buy Bitcoin to sell for another currency, or even buy homes in foreign lands. Yes, homes. Several homes have been listed with prices in Bitcoin.
And this is why China must keep a tight grip on the movement of Bitcoin in and out of the country. If the government in Beijing allows Bitcoin to freely circulate throughout its territory, it loses control of its currency — and Chinese wealth is then free to flow around the world.
Is China the end of Bitcoin?
Like fine art and gold, Bitcoin is a volatile, borderless, and nationless currency. One of its many benefits, besides lower transaction costs, is that it knows no limits. Buyers and sellers can send money anonymously, for whatever purpose, from skirting capital limitations to buying drugs on online marketplaces.
In places like China, where the movement of capital is controlled by law, Bitcoin provides some sense of financial freedom. Previously, only the ultrawealthy and the politically connected have been able to move massive amounts of money out of China. Bitcoin enabled the average person to enjoy similar opportunities.
In the United States, Bitcoin provides more value because of its low costs. Capital controls are of little concern. Rather, for most online merchants, paying a 1% fee to use a Bitcoin payment processor is much better than the 2%-3% fees PayPal, Square, or other credit card merchants might charge.
We’re in the early innings of the rise in cryptocurrencies, but the shutdown in China is a big setback for Bitcoin, which would have otherwise enjoyed a lift from Chinese citizens eager to move money outside the nation’s borders. But as with anything, if there’s a will, there’s a way. We probably shouldn’t count China out just yet.
WE Holdings to raise up to S$39.4m for business expansion
Will help finance cement and coal ventures. Singapore Exchage-listed WE Holdings Ltd (WE Holdings) announced that the company is proposing a renounceable non-underwritten rights cum warrants issue of up to 1,313,813,266 new ordinary shares in the capital of the company at an issue price of S$0.015 for each rights share, with up to 1,313,813,266 free detachable warrants.
Each warrant will carry the right to subscribe for one (1) new ordinary share in the capital of the company at an exercise price of S$0.030 for each Warrant Share on the basis of one (1) Rights Share with one (1) Warrant for every two (2) existing ordinary shares.
The company said it will be seeking specific approval from the Shareholders at an extraordinary general meeting of the company to be convened to approve the Rights cum Warrants Issue.
On 18 May 2013, the Company announced its entry into the term sheet for the proposed acquisition of 20% shareholding in Dragon Cement Co., Ltd. for an aggregate consideration of US$20 million.
Subsequently on 12 September 2013, for the purpose of funding the Dragon Cement acquisition, the company entered into share placement agreements with certain investors for the issue and allotment of an aggregate 204,050,000 new shares at an issue price of S$0.04302 per new shares for an aggregate amount of S$8,778,231, together with a grant of options to such investors to subscribe for an aggregate 204,050,000 additional shares at the issue price of S$0.047322 per option share, for an aggregate amount of S$9,656,054.10.
It was anticipated that on the issue of the placement shares and the full exercise of the option, the company will raise approximately S$17.66 million net proceeds to fund the Dragon Cement Acquisition.
While the Placement was completed on 2 October 2013, the options were not exercised by any of the investors and expired on 8 December 2013. As such, the company is now proposing to carry out the Rights cum Warrants Issue, with estimated net proceeds being ranging from S$12.7 million to S$39.41 million, and intends to use the net proceeds in the following proportions: (a) up to S$15 million to partially fund the Dragon Cement acquisition; (b) up to S$10 million to fund the expansion of the Group’s coal business; and (c) the balance, if any, towards the Group’s working capital requirements. “The proposed Rights cum Warrants Issue is in line with our plan to tap on the growth opportunities in the petroleum, oil and gas and related resources sector in Myanmar.
The company has decided to proceed with the Rights cum Warrant Issue on a non-underwritten basis as the company believes that the issue price of S$0.015 for each rights share and S$0.03 for each warrant is sufficiently attractive," said WE Holdings. 'Further, the Directors are of the opinion that there is no minimum amount which must be raised from the Rights cum Warrant Issue, as in the event it is unable to raise sufficient funds for the Dragon Cement acquisition, the company will source for alternative sources of funding, including but not limited to bank borrowings. Hence, in view of the above and the savings enjoyed for not having to bear underwriting fees, the company has decided to proceed with the Rights cum Warrant Issue on a non-underwritten basis.”
When it comes to palm oil production, Wilmar International (SGX: F34) can show the rest of the farmers a clean pair of heels. It is, after all, one of the world largest producers of palm and lauric oil. And that is the first thing to like about Wilmar because size, or more precisely economy of scale, matters.
Wilmar’s impressive Asset Turnover is evidence of its economy of scale. At 1.1, the company is generating $1.10 for every dollar of asset employed in the business. By comparison the Asset Turnover for Golden Agri-Resources (SGX: E5H) is 0.5; for Indofood Agri Resources (SGX: 5JS) it is 0.4, and for Malaysia’s largest palm oil producer, Sime Darby (KLSE: SIME), it is 1.0. Wilmar also handily beats the Asset Turnover of 0.5 for the 30 companies that make up Singapore’s blue chip index, the Straits Times Index (SGX: ^STI).
The second thing to like about Wilmar is that it produces a consumable. In other words, once it’s gone then it’s gone. Palm oil is an edible vegetable oil, which is used in foodstuff, in detergents and in the production of biodiesel. Around 50 million tonnes of palm oil is produced annually and around 50 million tonnes is consumed every year. Most of the production comes from Indonesia and Malaysia. The largest consuming countries are India, Indonesia, China and the European Union.
The final thing to like about Wilmar International is the resilience of its Return on Equity. As a price-taker, Wilmar has little control over the selling price of palm oil on the open market. Consequently, its Net Income Margin can fluctuate depending on the prevailing price of the commodity. That said, its Return on Equity of around 9% closely matches the returns from some of Singapore’s largest companies. This implies that investors are earning $9 for every $100 of equity invested in the business, which is not at all bad.
Ho Bee Land's earnings from overseas developments delayed
Here's what to blame.
According to CIMB, the lacklustre market for high-end properties in Singapore has prompted Ho Bee Land to expand overseas, particularly in Australia and China.
While CIMB views the shift away from high-end Singapore properties positively, earnings contributions are likely to be delayed as profits are recognised on a completed basis.
Here's more:
In China, Ho Bee owns stakes in several joint ventures for residential projects that are located in Shanghai, Tangshan and Zhuhai.
Among the projects, the Tangshan Nanhu Eco-city should provide the earliest earnings contribution from FY14 onwards, when it is estimated to be complete. Sales is expected to kick off in early 2014 according to the management. We expect other projects are expected to be completed from 2016 onwards.
In Australia, four residential sites were acquired in the past two years, underpinned by low land costs and bottoming property prices.
Ho Bee's Australian landbank now amounts to about 1.1m sq ft in GFA and costs A$36.5m. Developments are largely in the preliminary stage and we expect earnings contributions to filter in from FY16 onwards as well.
Sunningdale: Starting Up Manufacturing Operations In Brazil
15 Jan 2014 17:07
Sunningdale Tech Ltd. is presently looking into and have taken a number of preparatory steps towards starting up manufacturing operations in Brazil. This will be a greenfield project wholly owned by the Company and is at a very preliminary stage, the initial share capital that will be invested by the Group will not exceed US$1 million...
