Chinese IPO Indicator, Renminbi Pressure Indicator both Advance

Chinese IPO Indicator, Renminbi Pressure Indicator both Advance

December 19, 2006

    SHANGHAI, Dec. 19 /Xinhua-PRNewswire/ -- Xinhua Finance
and Milken 
Institute released updated values for the Chinese Initial
Public Offering and 
Renminbi Pressure indicators, both of which increased in
line with China's 
robust economic growth. 

    (Logo:
http://www.xprn.com.cn:9080/xprn/sa/200611140926.gif ) 

    The updated indicator charts can be found at 
http://www.xinhuafinance.com/en/charts/ipo_rpi.html 

    The Chinese IPO Indicator for November was 198.8, an
11.2% increase from 
October. The performance of new securities strengthened,
with the IPO market 
continuing its brisk ascent since the Shanghai and Shenzhen
markets reopened 
to new listings in May. November's indicator marked a
record high for the 
IPO Indicator. Although it was first released publicly last
month, the IPO 
Indicator calculates monthly values back to December 1997,
when the value was 
set to 100.  

    The double-digit month-over-month increase is largely
due to the fast-
climbing stock of the Industrial and Commercial Bank of
China (ICBC), China'
s largest commercial lender. ICBC launched its IPO on
October 27 on the 
Shanghai and Hong Kong stock exchanges, setting a world
record for raising 
US$19 billion. During November, ICBC's A share price
increased by 15%, while 
its H share price rose 13%. 

    The IPO Indicator tracks the share price performance of
new issues listed 
on the Shanghai, Shenzhen and Hong Kong stock exchanges. In
November, it 
comprised 64 securities, up from 50 in October. However,
James Barth, Senior 
Fellow of the Milken Institute, remarked that the new ICBC
and Bank of China 
issuances played a dominant role within the market
cap-weighted indicator. 
ICBC and Bank of China will remain in the indicator for 12
months before they 
are removed, as do all newly listed companies. The
performance of those 
shares will heavily influence the IPO Indicator's future
path.    
   
    Reflecting trends in China's currency market, the
Renminbi Pressure 
Indicator (RPI) continued to rise in September. It edged up
0.75%, to 188.3 
from 186.9, maintaining an upward trend in spite of the
renminbi's 
revaluation in 2005 and continued modest appreciation since
then.  
 
    Glenn Yago, Director of Capital Studies at the Milken
Institute, 
stressed, "Pressure on the currency continues to mount
with the actual 
exchange rate still trading in a fairly narrow band. The
intervention in 
China's foreign exchange market has been sharply reflected
in the now-
massive foreign exchange reserve, which recently passed the
US$1 trillion 
milestone. Among its many uses, the RPI gives a qualitative
assessment of the 
role that China is playing in exporting capital to the rest
of the world, and 
thus for mainly the United States."   

    The RPI indicates upward or downward pressure on the
RMB:USD exchange 
rate, as determined by changes in three primary factors:
the differentials in 
nominal exchange and interest rates between the U.S. and
China, as well as 
China's foreign exchange reserves. During the month of
September, China's 
yuan appreciated by 0.63% against the US dollar, while
China accumulated an 
additional 1.63% in foreign exchange reserves. Interest
rates remained 
steady.  

    Both the IPO Indicator and RPI are calculated monthly
and released mid-
month. The next releases of the IPO and Renminbi Pressure
indicators will be 
in January, 2007.  

    The two indicators are part of a series of eight
economic indicators 
designed to increase transparency and data quality in
China's burgeoning 
financial markets. The series applies the world-class index
calculation 
methodologies of Milken Institute, one of the world's
leading economic and 
financial research think tanks, and the extensive data
resources of Xinhua 
Finance, China's premier financial information and media
service provider. 
The Xinhua Finance/ Milken Institute China Indicators are
used by asset 
managers, underwriters, economists, and product developers
in assessing 
China's market environment in support of investment
decision-making. 

    To view additional information, visit 
http://www.xinhuafinance.com/indicators or 
http://www.milkeninstitute.org/chinaindicators . 

    About Xinhua Finance Limited

    Xinhua Finance Limited is China's unchallenged leader
in financial 
information and media, and is listed on the Mothers board
of the Tokyo Stock 
Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China's
financial 
markets and the world, Xinhua Finance serves financial
institutions, 
corporations and re-distributors through four focused and
complementary 
service lines: Indices, Ratings, Financial News and
Investor Relations. 
Founded in November 1999, the Company is headquartered in
Shanghai with 20 
news bureaus and offices in 19 locations across Asia,
Australia, North 
America and Europe. For more information, please visit 
http://www.xinhuafinance.com . 

    About the Milken Institute
 
    The Milken Institute is a nonprofit, independent
economic think tank 
whose mission is to improve the lives and economic
conditions of diverse 
populations around the world by helping business and public
policy leaders 
identify and implement innovative ideas for creating
broad-based prosperity. 
The Milken Institute has extensive expertise in China and
conducts ongoing 
research on China's banking and capital markets. It is
based in Santa 
Monica, CA. For more information, please visit 
http://www.milkeninstitute.org .


    For more information, please contact:

    Xinhua Finance

    China:
     Ms. Joy Tsang
     Tel:   [phone]
     Email: [e-mail]

    Japan:
     Mr. Jiong Sun
     Tel:   [phone]
     Email: [e-mail]

    Taylor Rafferty (Media contact for Xinhua Finance)

    Japan:
     Mr. James Hawrylak
     Tel:   [phone]
     Email: [e-mail]

    United States:
     Ms. Ishviene Arora
     Tel:   [phone]
     Email: [e-mail]

    Europe:
     Mr. John Dudzinsky
     Tel:   [phone]
     Email: [e-mail]

    Milken Institute

     Ms. Jennifer Manfre
     Communications Manager
     Tel:   [phone]
     Email: [e-mail]


SOURCE  Xinhua finance & Milken Institute