I'm currently based in China so I'm very familiar with interest rates here. I can say the interest income as reflected in your chart by these companies are very very low.
I'm not sure what interest bearing vehicles these companies park their cash (maybe in the C suite exec's personal accounts?) but anything interest rate below 2% in china is questionable.
Saving accounts' interest rates are 2-2.5% currently while FDs go up to 3-4% depending on time frame.
Wealth management products can give you 4-5% depending on time frame.
In my experience with China clients, most companies do like to hold on to excess cash due to China's inherent lack of security, distrust of companies/people (including their own) and cash flow flexibility (esp when the company needs to close down)
Cash is easily drawn in times of need/crisis and things do change very fast in China, especially in the past 2-3 years.
While I understand the appeal of Dukang's corporate growth story, I'm quite mystified with Dukang's 50-60% rise this year.
The white wine market has shown great signs of weakness with the govt's austerity drive and Xi Jinping's directive of less-is-more is destined to put a damper on luxury and extravagance.
I bought Maotai for my customers last year as gifts at 2.5K RMB per teeny tiny bottle and recently I bought the same bottle at 1.6K RMB at the same place/same brand.
Talk about price adjustment.
Furthermore, Dukang's main market of Henan is a very poor province hence low margins and its lackluster brand name (Henan spirits is not prestigious or highly valued as Guizhou or Sichuan) will be challenging when it tries to market in bigger baijiu markets beyond Henan.
But I guess that's the wonders of hot money and penny stocks.
(25-05-2013, 10:56 AM)rogerwilco Wrote: CY09, I recently tried to compile a list of SGX listed companies with their interest income vs cash balance. All data are based on 2012 annual report.The list is certainly not comprehensive.
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Anyone has data on China's current account average interest rates?