In the news: Alibaba faces SEC probe, Goldman sees 70% chance of China MSCI inclusion and BOC Aviation goes public for $1.1 billion

Goldman sees 70% chance of China shares joining MSCI

The odds of Chinese stocks winning inclusion to MSCI Inc.'s global indexes in June have shot up to 70% with the government's efforts to curb trading halts and clarify beneficial ownership rules, according to Goldman Sachs Group Inc. The investment bank, which had given odds of 50% in April, said that China now needs to deal with the remaining concerns of a 20% monthly fund repatriation limit, anti-competitive clauses on index products and daily quota limits on a cross border stock program. Inclusion in the global benchmark would be a major boost to China's stocks in the long term, while allowing foreign investors access to the nation's $5.6 trillion equity market. A decision by the MSCI in two weeks' time may not, however, draw an immediate flood of investment, with the Shanghai Composite Index down 20% for the year in the worst performance among more than 90 share benchmarks around the world.

BOC Aviation's $1.1 billion IPO rides sector boom

Bank of China Ltd. aircraft leasing unit BOC Aviation will debut on the Hong Kong stock exchange on Wednesday after raising HK$8.7 billion ($1.1 billion) amid accelerating growth in the industry. Airlines serving the Asia-Pacific region are finding it easier to lease rather than buy jets from Airbus Group SE or Boeing Co., which estimates that airlines in Asia will fly more than 16,000 planes within 20 years. BOC Aviation, the biggest lessor in the region, has 270 planes and purchases aircraft from manufacturers and leases to carriers such as Southwest Airlines Co., Aeroflot PJSC and EVA Airways Corp. The leasing business was traditionally dominated by companies including General Electric Co.-backed GECAS and ILFC, though Asian firms like BOC and Sumitomo Corp.-backed RBS Aviation are emerging to challenge their position. China's banking regulator eased rules for commercial lenders in the leasing business in 2014, taking a more open and flexible attitude towards financing arrangements. Companies in the industry in Asia are focusing on growth with economists forecasting that the region will overtake the U.S. as the world's biggest aircraft market in the next 20 years.

Alibaba faces SEC investigation over accounting practices

Alibaba Group Holding Ltd. said it is being investigated by the U.S. Securities and Exchange Commission (SEC) over its accounting practices and whether they violate federal laws. The SEC requested information from the world's largest e-commerce platform relating to its Singles' Day extravaganza on November 11, Alibaba's biggest shopping day, and how the company consolidates results from affiliated businesses including logistics partner Cainiao Network and other related-party transactions. Alibaba said that the SEC's request should not be construed as an indication that any violation of federal securities laws has occurred. Alibaba's accounting practices have prompted concern from investors for a while, with the latest focus on the staggering $13.7 billion in sales earned within the 24 hours of Singles' Day. The SEC issue is apparently related to the company's definition of gross merchandise volume, which means total transactions and allegedly doesn't deduct fake orders (sellers purchasing their own products to boost ratings). This could have inflated sales figures by up to 30%, one analyst said. The market is generally in agreement that the aim of the probe is to increase transparency. Similar inquiries have been made to other Chinese internet companies due to a lack of familiarity with how they are set up and operate.

Goldman sees 70% chance of China shares joining MSCI

The odds of Chinese stocks winning inclusion to MSCI Inc.'s global indexes in June have shot up to 70% with the government's efforts to curb trading halts and clarify beneficial ownership rules, according to Goldman Sachs Group Inc. The investment bank, which had given odds of 50% in April, said that China now needs to deal with the remaining concerns of a 20% monthly fund repatriation limit, anti-competitive clauses on index products and daily quota limits on a cross border stock program. Inclusion in the global benchmark would be a major boost to China's stocks in the long term, while allowing foreign investors access to the nation's $5.6 trillion equity market. A decision by the MSCI in two weeks' time may not, however, draw an immediate flood of investment, with the Shanghai Composite Index down 20% for the year in the worst performance among more than 90 share benchmarks around the world.

BOC Aviation's $1.1 billion IPO rides sector boom

Bank of China Ltd. aircraft leasing unit BOC Aviation will debut on the Hong Kong stock exchange on Wednesday after raising HK$8.7 billion ($1.1 billion) amid accelerating growth in the industry. Airlines serving the Asia-Pacific region are finding it easier to lease rather than buy jets from Airbus Group SE or Boeing Co., which estimates that airlines in Asia will fly more than 16,000 planes within 20 years. BOC Aviation, the biggest lessor in the region, has 270 planes and purchases aircraft from manufacturers and leases to carriers such as Southwest Airlines Co., Aeroflot PJSC and EVA Airways Corp. The leasing business was traditionally dominated by companies including General Electric Co.-backed GECAS and ILFC, though Asian firms like BOC and Sumitomo Corp.-backed RBS Aviation are emerging to challenge their position. China's banking regulator eased rules for commercial lenders in the leasing business in 2014, taking a more open and flexible attitude towards financing arrangements. Companies in the industry in Asia are focusing on growth with economists forecasting that the region will overtake the U.S. as the world's biggest aircraft market in the next 20 years.

In the news: Alibaba faces SEC probe, Goldman sees 70% chance of China MSCI inclusion and BOC Aviation goes public for $1.1 billion

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