FerroChina

Credit Suisse is arranging a US$200 m loan for SGX-listed steelmaker FerroChina to refinance debt and for other corporate needs, banking sources said Tue. The 3-year syndicated loan will offer 450 basis points above the London Interbank Offered Rate (LIBOR), one of the sources briefed on the deal told Reuters.

FerroChina, which makes galvanised steel in China, is widely seen as a takeover target after it appointed Merrill Lynch as an adviser to look at strategic options for the firm. FerroChina was not immediately available for comment.

"In current market conditions, this should be bearish news as US$200 m will add to gearing," said a dealer at a local broker. "Previously the firm also issued some convertible bonds, so market investors may view it as negative news because of its over-gearing, and it looks like their debt-level is pretty high."

FerroChina's long term debt-to-equity ratio is 0.19, which is higher than most other SGX-listed steel firms. In May, Chinese media reported that Australia and Russian firms are eyeing at least a 20% stake in the China-based company.

FTSE ST China Top Index

A new FTSE ST China Top Index tracking the 20 largest China stocks listed on SGX has been launched. To be eligible for inclusion in the new index, companies must have either at least 30% ownership by the Chinese government, companies or nationals; or derive at least 50% of revenues from China.

The existing FTSE ST China Index, with its larger basket of 50 component stocks, will continue to act as a general market barometer of the state of China companies listed here.

Both the FTSE ST China Index and the FTSE ST China Top Index will offer opportunities for the creation of and investment into China index-linked products, including exchange traded funds (ETFs), structured products and other derivatives.

The list of stocks is below:
BIO-TREAT TECHNOLOGY
CAPITARETAIL CHINA TRUST*
CHINA AVIATION OIL (S) CORPORATION
CHINA ENERGY
CHINA HONGXING SPORTS
CHINA SKY CHEMICAL FIBRE
CHINA XLX FERTILISER
COSCO CORPORATION (S)
DELONG HOLDINGS
EPURE INTERNATIONAL
FERROCHINA*
FIBRECHEM TECHNOLOGIES
HONG LEONG ASIA*
HSU FU CHI INTERNATIONAL*
MIDAS HOLDINGS*
PACIFIC ANDES*
PEOPLE'S FOOD HOLDINGS*
SYNEAR FOOD HOLDINGS
YANGZIJIANG SHIPBUILDING HOLDINGS
YANLORD LAND GROUP*

* Stocks not included in the FTSE ST China Index

Stock Challenge

I read about the Stock Challenge on Next Insight. The gains the participants made are no big deal. Some use margin, some not. Those who trade on margin are at an advantage.

The rules are not clear. But I assume can only trade SGX stocks and not warrants. I shall unofficially enter the contest. I'm confident that at the end of the Challenge, I can beat them :-)