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Apr-21-2008ASIA MARKETS Honda drives Tokyo gains; banks rally in Sydney(topic overview)
CONTENTS:
- The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, was down 2.18 percent following a weaker Shanghai market. (More...)
- China Petroleum & Chemical Corp. (Sinopec) jumped 4.8 percent to HK$7.69. (More...)
- Thursday May 1 -Japan April auto sales -Japan weekly capital inflows -Australias March building approvals data -Australias Westpac Banking Corp. H1 to March financial results -Australias Alumina Ltd. AGM -Australias GPT Group AGM -Australias Woodside Petroleum Ltd. AGM -US March ISM manufacturing index -US March construction spending -US March auto and light truck sales -US Exxon Mobil Q1 results. (More...)
- Among local banks, Hang Seng Bank was up 1.0 hkd or 0.68 pct at 147.8, Bank of East Asia lost 0.6 hkd or 1.4 pct to 42.35, and BOC Hong Kong was up 0.16 hkd or 0.82 pct at 19.56. (More...)
- In Japan, the Nikkei 225 Average closed higher on Friday by 78 points or 0.58 percent at 13,476 points and the broader Topix index moved higher by 0.8 percent to 1,304 points, led by the shares of Bull-Dog Sauce rising by 5.8 percent to $2. (More...)
- Bigger rival China Life Insurance firmed 0.3 percent to HK $29.15 after the company reported first-quarter premium income of 102.2 billion yuan. (More...)
- Despite surging commodity prices, related shares failed to perform. (More...)
- In the financial industry, shares of National Australia Bank dropped by 2.1 percent to $25, ANZ Banking shed as much as 3.2 percent to $18, followed by shares of Commonwealth Bank of Australia declining by 1.9 percent to $38. (More...)
- Among airlines, Air China slipped 0.32 hkd or 5.8 pct to 5.20, China Eastern fell 0.21 hkd or 6.75 pct to 2.90 and China Southern was down 0.33 hkd or 6.83 pct at 4.50. (More...)
- Fine wine prices have soared over the past year as increasingly wealthy consumers in Asia and Russia start collecting wine. (More...)
- Which makes the decision by the Chinese Government last month to cancel Weinstein's permit to shoot "an Asian Casablanca" -- the new film Shanghai -- in China all the more intriguing. (More...)
- Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. (More...)
- EPS forecast $0.81 versus $0.74 -US Time Warner Inc. Q1 results. (More...)
- Holding a vested interest in the world's fastest-growing economy has clear advantages and disadvantages, and in the coming week investors in traditionally defensive Chinese plays may see more of the latter than they have been accustomed to in recent weeks. (More...)
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The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, was down 2.18 percent following a weaker Shanghai market. Shanghai stocks.SSEC tumbled more than 4 percent early on Friday before recovering to 3,152, down 2.20 percent at 0326 GMT, with PetroChina sliding below its IPO price for the first time. Shares in PetroChina fell 1.68 percent to HK$9.93 in Hong Kong after they dropped more than 5 percent in Shanghai to hit a low of 16 yuan, below the stock's offering price of 16.70 yuan in last year's Shanghai IPO. [1] China Life Insurance LFC dipped 1% to HK$28.75. Trading volumes were stronger than they have been for the rest of the week, but still sluggish at HK$79.89 billion ($10.25 billion). Traders said they expect a trading range of around 23,700 to 25,000 to hold for the time being in the Hang Seng. Shares on the Chinese mainland continued to fall as domestic investors digested this week's high inflation data and the potential drop-off in equity prices as lock-up periods for last year's IPOs expired. Many Shanghai shares were performing significantly worse than their Hong Kong-listed rivals.[2] "Due to the physical size of the city and the close social webs, it is easier to pass success stories to one another, leading to greater price bubbles." During last year's bull market, these success stories carried an implicit belief that whoever heard them had an opportunity to cash in. "I have a friend who has worked in this manufacturing company for many years and he heard the chairman secretly plans to move the factory to Vietnam and is going to sell the property at HK$1 billion," John, an investor, says. "It would be good to buy the stock before the news is out." This word-of-mouth trading culture may have fuelled the Hang Seng Index's blast out of orbit last year as investors seized on market-wide rumours speculating about the imminent implementation of the "through-train scheme", which would allow mainlanders to invest directly in Hong Kong.[3] Concerns the Shanghai index will breach the psychologically important 3,000 level increased caution among Hong Kong investors Friday, said Peter Lai, a director at DBS Vickers. Lai said he expects the Hang Seng Index to be capped around 25,500-25,800 in the near term on Chinese mainland market weakness. "I would suggest investors buy stocks if the index retreats back below 22,000," he said. Heavyweight PetroChina fell 2.77 percent as poor sentiment towards the oil producer in Shanghai spilled over to its H-shares in Hong Kong.[4] Hang Seng China Enterprise Index, which tracks the overall performance of 43 Chinese mainland state-owned enterprises on Hong Kong Stock Exchange, shrank 212.33 points or 1.65% to 12,675.43 points. Chinese power companies listed in Hong Kong witnessed the biggest loss on Friday as concerns about their profitability rose amid surging operating costs.[5]
The Hang Seng index edged down 0.3%, or 61.18 points, to 24,197.78, reversing a 141.91-point gain in the morning session as Chinese heavyweights turned lower. The H-shares of PetroChina (nyse: PTR - news - people ) slid 2.8%, to 9.82 Hong Kong dollars ($1.26), in Hong Kong after its A-shares in Shanghai fell below their IPO price of 16.70 yuan ($2.30), to 16.02 yuan ($2.29).[6] Shares of Hong Kong listed China Molybdenum Co another major Chinese producer of the metal have tumbled nearly 50% since the start of the year compared with a nearly 15% drop in Hong Kong's benchmark Hang Seng Index.[7] The Hang Seng China Enterprises Index, a measure of so-called H shares of Chinese mainland companies, lost 1.7 percent to 12,675.43. The main Hang Seng benchmark has slumped 1.9 percent this week, snapping a three-week, 17-percent rally, amid concern Chinese measures to curb inflation will slow economic growth and after Group of Seven finance ministers said global economic prospects have weakened. China will raise interest rates this year to cool inflation that is close to an 11-year high, after six increases in 2007, according to some economists. The central bank ordered banks to set aside more deposits as reserves for the third time this year.[8] Turnover increased to 79.89 billion HK dollars (10.26 billion U. S. dollars) from Thursday's 72.66 billion HK dollars (9.33 billion U.S. dollars). The benchmark Hang Seng Index was down 1.9 percent for the week, and off 13 percent from the start of this year. Blue-chip heavyweight China Mobile rose sharply on expectations of strong first-quarter results, but those gains failed to lift the broad market on concerns of further weakness in mainland's stock markets.[4]
At 10:20 a.m. (0220 GMT), the Hang Seng Index was up 636.93 points or 2.63 percent at 24,834.33. China's move asking investors with locked-up shares to sell them in block trades -- easing downward pressure on the stock markets -- also helped lift sentiment.[9]
HONG KONG (Thomson Financial) - Hong Kong shares were sharply higher in early trade on Monday, with investors encouraged by Wall Street's gains on easing concerns about the credit crisis and China's move to arrest the decline in its stock markets. Investors bought U.S. stocks on Friday after the nation's top lender Citigroup cut its losses by half to $5 billion in the first quarter from the previous three months.[9] China Construction Bank (CCB) was up 2.8 percent at HK$6.33. Investors brushed aside a Financial Times report Monday that Bank of America is selling some of its 9 percent stake in CCCB to boost its capital. Bank of America may also exercise its option to buy more shares in China's second-largest lender to keep its 'cordial relations with CCB,' it said. Other financial stocks also gained. The mainland's biggest lender, Industrial and Commercial Bank of China (ICBC), rose 2.6 percent to HK$6.02 on speculation it is about to close a deal with shareholders who are selling their stake in Hong Kong's Wing Lung Bank.[9] A strong day in the Hong Kong stockmarket yesterday prompted shareholders of two major companies to sell part of their holdings, raising a combined $789 million. One might question why they are selling while the stocks are still well below their highs, but the two block trades in shoe manufacturer and retailer Belle International Holdings and coal miner China Shenhua Energy nevertheless sent positive signals to the market. Belle was priced above the mid-point of the range, suggesting investors are prepared to pay a bit more to increase their exposure. The smaller Shenhua block was offered at one of the tightest discounts of any Hong Kong placement this year and even though it priced at the widest end of the range, the final price was still above the previous day's closing price. Together with the increase in the number of placements over the past week, this points to an increased level of confidence both among investors and issuers and indeed among the banks that take on these deals.[10] Much of the gains in China Mobile have been the result of a pre-earnings rally, while Baidu has benefited from investors' associations of the stock with global search-engine leader Google GOOG. Such thinking ignores the reality that these companies derive most of their earnings from domestic Chinese consumption -- a fact that is beginning to be taken into account in Hong Kong, after the release of Chinese data this week. Macquarie's Rocks lists a short trade on consumption stocks as one of his top 10 trades for the week ahead, in a research note issued Friday. As a way of protecting against a potential further spike in equity prices in general, Rocks recommends buying Chinese banks, such as HSBC and Bank of China BACHF.[11] HONG KONG, April 18 (Reuters) - Hong Kong stocks fell 0.25 percent after holding a tight range on Friday, tracking a weak Chinese share market, which tumbled to a fresh 12-month low, but China Mobile (0941.HK: Quote, Profile, Research ) rose ahead of Monday's quarterly earnings.[12]
The shares were sold at 41 times 2007 diluted earnings, based on Chinese accounting standards, the Hong Kong-listed company said. Investors ordered 215 times the stock on sale, indicating undeterred appetite for a stock market that has retreated 37 percent this year. Chairman Chen Jinghe said this week he's seeking mining assets in Latin America and Africa. "The price-to-earnings ratio is fair given its growth prospects,'' Deng Liangsheng, Shenzhen-based analyst at China Merchants Securities Co. said by phone today.[13] The Hang Seng's valuation has dropped from 20.94 times earnings on November 1 to 14.06 times earnings on Friday, Bloomberg reports. Even though Hong Kong has enjoyed a robust domestic economy this year - recording its lowest jobless rate in a decade in February and experienced its fastest economic expansion in seven quarters in the fourth quarter last year - investors still seem worried about getting swamped by waves from overseas markets. Investor sentiment in Hong Kong has seen the second-biggest fall in Asia (excluding Japan, Australia and New Zealand) in the first quarter this year, ING's quarterly Investor Dashboard survey reported last week.[3] Rumours may have helped precipitate a fierce sell-off in January, as investors tried to cut and run amid mounting concerns about the global economy and fears that the through train would be scrapped. The Hang Seng Index slumped 15.67 per cent, outpacing most other regional benchmarks, including those of Japan, South Korea, Taiwan and Indonesia. Unlike those countries, Hong Kong has been caught between a rock and a hard place this year, squeezed by its ties to the mainland and the U.S. Investors have been grasping for direction as they contend with an overheating economy across the border and a faltering one on the other side of the Pacific.[3]
In Hong Kong, the Hang Seng Index closed lower by 0.3 percent to 24,199 points, while the Hang Seng China Enterprises Index declined by 1.7 percent to 12,670 points on Friday.[14] In China, the Shanghai Composite Index dropped 128 points, or 4%, to 3,094.67, while Hong Kong's Hang Seng eased 61 points, or 0.3%, to 24,197.78 after holding up throughout the morning session.[2]
Introduced on Oct. 3, 2001 and readjusted on Sept. 11, 2006, the Hang Seng Mainland Composite Index gauges the performance of 103 Hong Kong-listed companies with principal places of business in Hong Kong and the Chinese mainland.[15]
Only Singapore dropped further, falling from 136 to 88. Financial centres like Hong Kong and Singapore are highly attuned to overseas markets and are not as insulated as some of their neighbours who can fall back on booming domestic economies, says Nicholas Toovey, regional head of equity at ING Investment Management. "They're both cities, so of course they are highly exposed to everything going on around them. They are very sensitive to what's happening with their trading partners." The Hang Seng Index has clawed back 14.64 per cent of its value since hitting 12.34 times earnings on March 20, but only on the back of limited trading.[3]
Main board turnover has managed to exceed HK$100 billion only six times since January as investors stick to the sidelines. Even after the Hang Seng Index rallied to its third straight weekly gain on April 11, market observers remained sceptical that investors were committed to a sustained advance. "It doesn't mean that it is out of the woods because trading volume is quite thin, and if there are any negative news items coming out from economic data, the market will probably reverse its course quite easily," Alex Tang Yee-yuk, a research director at Core Pacific-Yamaichi International, said on April 11. The Hang Seng Index snapped its string of weekly gains on Friday, falling 1.91 per cent last week to 24,197.78.[3]
The Hang Seng China Enterprises index was down 74.11 points or 0.58 pct at 12,813.65, off a low of 12,725.38 and a high of 12,908.54. (1 usd = 7.8 hkd) [email protected] gn/kmq - xfngn/xfnkm Copyright Thomson Financial News Limited 2008.[16] The Hang Seng China H-Financials Index went down 266.02 points, or 1.65 percent, to close at 15,889.02.[15] The benchmark Hang Seng Index.HSI had edged up 0.06 percent to 24,274.72 by the midday break, underpinned by a 2.6 percent rise in China Mobile (0941.HK: Quote, Profile, Research ) on expectations it will announce positive first-quarter earnings on Monday.[17] China Mobile rose 1.9% to HK$131.50, losing around a percentage point of its momentum along with the Hang Seng during the afternoon. The company announces quarterly earnings Monday, and investors hope the report will show that it's still the clear leader in the China telecom sector.[2]
'China Mobile is a large-cap stock and it is among the first that moves in any general market movement. It is likely to continue its uptrend on positive news about its strong first-quarter earnings and prospects of more growth as it goes into the 3G market,' Gorges said. 'PetroChina is not completely out of the woods, but news about the Chinese government's subsidy on its oil refining losses are positive,' he said. Gorges, however, noted that as the key index approaches the 25,000 points level, this may prompt investors to exercise caution. 'Investors will continue to watch the U.S., especially its housing and credit markets,' he said.[18] Once the mainland bourses show some stabilizing signals, local shares will gain the necessary upward momentum,' Yip said. Matthew Kwok, research head at Tanrich Securities, said the market was consolidating its recent gains. 'Scores of investors took profit after recent gains. and they are waiting for more leads to decide their investment approach,' said Kwok. He expects the key index to hover around the 24,000-point level in the near term. Kwok noted that investors will soon be turning their attention to the first-quarter results of major Chinese firms. China Mobile will announce its first-quarter results on Monday, followed by China Merchants Bank on Tuesday. Other China banks and oil counters will report later in April.[16] Mainland shoemaker Belle International dropped more than 2 percent and China's top coal producer China Shenhua Energy lost more than 2.2 percent after share placement news. "The continued weakness in the Shanghai market and PetroChina's fall there below its IPO price were the major factors which pulled down our market," said Patrick Yiu, associate director at CASH Asset Management. "Some of the negative sentiment on the mainland bourse spilled over into our market," he said. "It's a good thing that China Mobile performed strongly because of expectations that it will report strong first quarter results," Yiu said. "Its gains, together with interest in select utilities and general firmness in overseas bourses, helped offset falls attributed to continued weakness in the Shanghai market," he said.[19] The China Securities Regulatory Commission (CSRC) said it is imposing restrictions on the sale of listed-company stock coming out of lockup periods to boost confidence in the stock market. It will require block trading in cases when more than 1 pct of a listed firm's outstanding shares emerging from lockup are expected to be sold within a month. Shares emerging from lockup cannot be sold in the 30 days before a listed company releases its annual or half-year financial results. China Mobile was up 3.35 pct ahead of its first quarter results after market close today.[18] Search engine leader Google's higher-than-expected results provided more cheer to a market which had been saddled with fears that the world's biggest economy may slip into a recession due to the housing and financial slump. 'Regional markets are up this morning and Wall Street did well on Friday, so there is no excuse for the Hong Kong stock market not to go up today,' said Howard Gorges, vice chairman at South China Securities.[9] 'The market is very news-driven now but more by the news from China than Wall Street. This year, the Hong Kong market has declined twice as much as Wall Street,' said South China's Gorges. ($1 = HK$7.80) [email protected] - Copyright Thomson Financial News Limited 2008.[20]
Belle shares slid 3.5 percent to HK$7.91 and China Shenhua fell 2.6 percent to HK$34.10. Paint and ink maker Yip's Chemical Holdings is offering 50 million shares at HK$5.50 per share and is expecting to raise a net HK$269 million to fund its expansion and replenish its working capital, the company told the Hong Kong stock exchange, confirming an IFR Asia report.[21] Zijin's Hong Kong-listed shares closed at HK$7.62 on Thursday. The company had set its price range at a premium to its Hong Kong share price, at 6.88 yuan to 7.13 yuan apiece for the Shanghai initial public offering, according to sources.[22] The final price was fixed at HK$7.70 for a 6.1% discount. This was the first Hong Kong placement to price in the upper half of the indicative price range since IBM's sell-down in Lenovo in late February. That deal was a lot smaller at about $80 million, but was priced at the top of the price range at a tight 3% discount. Most deals (excluding those that were offered at a fixed price) have priced right at the bottom as investors have sought downside protection in case of a share price tumble.[10] Hong Kong and Shanghai equities closed lower Friday on a loss estimate from Shanghai Electric Power and reports that some institutional investors were selling up to 6.5 billion Hong Kong dollars ($833 million) worth of shares.[6] HONG KONG, Apr. 18, 2008 (Thomson Financial delivered by Newstex) -- Hong Kong shares closed lower on Friday, dragged down by steep losses on mainland bourses and by reports that some investors were selling up to HK$6.5 billion worth of shares in three locally-listed companies.[20] HONG KONG (Thomson Financial) - Hong Kong shares finished a volatile morning session little changed on Friday, with many investors retreating to the sidelines following Wall Street's lacklustre performance overnight and reports of share placements in certain companies.[21]
HONG KONG (XFN-ASIA) - Share prices finished the morning flat as caution reigned ahead of the weekend after a lackluster performance on Wall Street overnight and a continued fall in mainland markets. Large caps, including HSBC, Hong Kong Exchange and Clearing (HKEx) and Hutchison Whampoa, were lower in profit-taking after their recent gains. PetroChina H-shares fell more than 2 pct after its Shanghai-listed A-shares dropped below their IPO price.[16] HONG KONG (XFN-ASIA) - Share prices closed slightly lower, weighed down by a nearly 4 pct fall in the Shanghai market and the drop of PetroChina's A-shares below their IPO price.[23] HONG KONG (XFN-ASIA) - Share prices were higher mid-morning on Wall Street's rally Friday and a surge in Shanghai this morning following Beijing's decision to support its sagging bourses.[18]
Shares in Shanghai plunged for a second straight day in Asia Friday, while Hong Kong gave up an early rally to finish in the red, despite a gain in key index component China Mobile CHL.[2] HONG KONG: Zijin Mining Group Co Ltd, China's second-biggest gold miner, plans to raise 9.98 billion yuan ($1.43 billion) after it priced its Shanghai share sale at the top of an indicative range. Zijin said on Friday it would issue 1.4 billion A shares at 7.13 yuan apiece, just days after it cut its fund-raising target from 1.5 billion shares amid a sluggish domestic market.[22] A few major players in Hong Kong were eager to cash in amid market uncertainty. Belle International Holdings shed 2.4%, to close at 8.00 Hong Kong dollars ($1.03); the largest maker of women's shoes in China confirmed Friday that some of its investors were seeking to divest their shares in the company.[6] 'Sometimes gloom just feeds on itself,' said Gorges. In Hong Kong, Belle International Holdings (OOTC:BELLF), China's largest maker of women's shoes, confirmed that some of its investors were offering to sell shares in the company.[20]
HONG Kong stocks declined yesterday, with the benchmark index completing its first weekly drop in a month, after investors sought to sell stakes in China Shenhua Energy and Belle International Holdings.[8] The remainder of the merchant's sales went to UK investors who are expected to hold the wine for six to 12 months before selling it on to Asia. Bordeaux Index, a London-based wholesale wine trader, said its sales to Hong Kong had soared too after the tariffs were dropped. It expects to send 20m of wine to the city this year, double its usual amount. Merchants expect Macao to follow Hong Kong's lead in dropping wine import tariffs, and are hopeful China may also reduce them.[24]
One of the most popular wines in Hong Kong is Chteau Lafite Rothschild 2005, which is today trading at about 9,600 ($19,000) per case, up from 3,300 two years ago.The Liv-ex 100, an online index of top wines traded out of London, hit a new high in March the most recent month for which data are available - 34 per cent higher than a year earlier. Simon Staples, sales director at London wine merchant Berry Bros & Rudd, said he had sold 4.6m of wine in the first 36 hours after Hong Kong got rid of import duties of 40 per cent at the end of February.[24]
The H-shares index, initiated in August 1994 and readjusted on March 10, 2008, tracks the overall performance of 42 Chinese mainland state-owned enterprises listed on the Hong Kong Stock Exchange.[15] HONG KONG, April 18 (Xinhua) -- Hong Kong stocks dipped 61.18 points, or 0.25 percent, to close at 24,197.78 on Friday, tracking the fall of the Chinese mainland markets.[4] HONG KONG, April 21 (Reuters) - Hong Kong stocks surged on Monday, tracking gains in overseas markets, as a move by Beijing to limit the flow of non-tradeable shares fuelled a near 7 percent rally in mainland shares traded in Shanghai.[25] HONG KONG, April 18 (Reuters) - Hong Kong stocks held steady on Friday, but investors were cautious after mainland shares fell for three consecutive days on fears that high inflation may trigger further macro economic control measures from Beijing.[17]
Apr. 21, 2008 (China Knowledge) - Hong Kong stocks dipped slightly on Friday, tracking mainland markets' fall on concerns over further macro economic control measures to curb inflation.[5]
The mainland's biggest aluminum producer plans to sell up to 10 billion yuan worth of bonds due in three or five years, the company told the Hong Kong stock exchange Thursday.[21] The Belle transaction was by far the biggest of the two at HK$5.47 billion ($702 million), although just over half of that was bought by a group of management shareholders, which reduced the portion of stock that had to find buyers in the market. Including the management portion, this was the largest placement in a Hong Kong-listed company so far this year, exceeding the $600 million sell-down in Cheung Kong (Holdings) in early January.[10] Zijin fell 25 Hong Kong cents, or 3.3 percent, to close at HK$7.37. The stock has fallen 39 percent this year.[13]
China Petroleum & Chemical Corp. (Sinopec) jumped 4.8 percent to HK$7.69. Sinopec said its first-quarter net profit may fall more than 50 percent from 19.42 billion yuan ($2.77 million) a year earlier due to higher crude oil prices abroad. China's'strict control over refined prices' resulted in the 'distortion' of the pricing of its products in the domestic market, the nation's biggest oil refiner said. Crude oil reached more than $117 a barrel, a record level, in New York on Friday after the Organisation of Petroleum Exporting Countries said it may not raise its output. [9] China Southern Airlines surged 7.8 percent to HK$4.85 after it reported that it posted a 796 million yuan ($113.7 million) net profit in the first quarter, reversing a loss of 188 million yuan a year ago.[9] Ping An Insurance lost 2.8 percent at HK$59.80. China's second-biggest insurer said its four units posted premium income of 35.8 billion yuan for the first quarter, with revenue from its life insurance business contributing 27.7 billion yuan.[21]
JPMorgan has forecast that China Mobile will report a 33 pct year-on-year rise in first quarter earnings to 23.4 bln yuan. PetroChina was up 3.05 pct and China Petroleum & Chemical Corp (Sinopec) gained 3.27 pct after announcing that they expect to receive government subsidies to help them offset the impact of price controls on processed oil products starting this month. They said they also expect to receive a rebate from the government on value-added tax on oil products, such as gasoline and diesel, that will relieve losses in their oil refining operations.[18] JPMorgan (NYSE:JPM PRH) (NYSE:JPM PRX) (NYSE:JPM PRK) (NYSE:JPM PRJ) (NYSE:JPT) (NYSE:JPM) has forecast China Mobile will report a 33 pct year-on-year rise in first quarter earnings to 23.4 bln yuan.[23]
China Mobile surged 4.30 hkd or 3.35 pct to 135.90 on expectations that it will report strong earnings for the first quarter after market close.[18]
China Mobile gained 1.94 pct on expectations that it will report strong first quarter results on Monday and interest in select utilities cushioned the market's fall.[23] China Mobile, meanwhile, outperformed on hopes of strong first quarter to March results, extending yesterday's 1.3 pct gain on restructuring hopes.[16]
JPMorgan (NYSE:JPM PRH) (NYSE:JPM PRX) (NYSE:JPM PRK) (NYSE:JPM PRJ) (NYSE:JPT) (NYSE:JPM) said it expects China's top mobile operator to report on Monday a net profit of 23.4 bln yuan for the first quarter, up 33 pct year-on-year.[16]
The restructured China Re has registered capital of 36.149 bln yuan, with Central Huijin, a wholly-owned subsidiary of sovereign fund China Investment Corp, and the Ministry of Finance holding 85.5 pct and 14.5 pct respectively. The reinsurer said it will consider listing shares in both domestic and overseas stock markets after introducing a strategic investor, although it gave no timetable nor identify potential strategic investors.[26] The mainland share sale, which was announced last December, has been delayed partly by a slide in China's stock market. The country's main Shanghai stock index has fallen about 47 per cent since its peak hit last October.[22] The listing came in the wake of heavy losses in China's stock market due to worries over monetary tightening, excessive supply of new shares and the U.S. economic outlook.[7]
April 18 (Bloomberg) -- Zijin Mining Group Co., China's largest gold producer, raised 10 billion yuan ($1.43 billion) by selling shares in Shanghai for the first time to fund acquisitions and projects. Zijin sold 1.4 billion new shares at 7.13 yuan each, the top end of its indicated range, the Fujian province-based company said today in a statement.[13] Shares of PetroChina Co. fell by as much as 5 percent to $2.29 in Shanghai, followed by the airlines including China Eastern dropping by up to 10 percent and China South Airlines Co. declining 9.8 percent due to record high crude oil prices.[14]
Yip's Chemical shares were 2.4 percent lower at HK$5.76. Investors were also wary about tight monetary policy continuing in China as mainland authorities battle inflation, which has stayed close to its highest level in 12 years.[21] Turnover was 28.11 bln hkd. 'The rallies on Wall Street last Friday and in Shanghai this morning provided key support to our market today,' said Howard Gorges, vice chairman at South China Securities. 'Investors now have a more upbeat view on the world's economy and are more comfortable than before,' he said. 'In China, inflation remains a concern which may prompt the government to adopt more tightening measures which may or may not hit its markets. H-shares are generally doing very well today after the government's latest policy move on nontradeable shares,' he said.[18] Linus Yip, a strategist with First Shanghai Securities, noted a wait-and-see attitude among investors after a lackluster performance on Wall Street and continued weakness on mainland markets. 'Sentiment remained relatively firm this morning, with buying interest emerging whenever share prices touched low levels,' he said. 'Investors are just waiting for some positive leads from overseas markets before pushing share prices higher,' he said.[16]
Separately, an investor will also be selling shares in China Shenhua Energy, the mainland's largest coal producer, according to IFR Asia, a unit of Thomson Reuters. (NYSE:TRI) (TSX:TRI) 'Some people can't wait to cash out. It is a sign that the market has reached its temporary peak,' said Francis Lun, general manager at Fulbright Securities.[20] Separately, an investor is planning to sell shares in China Shenhua Energy (other-otc: CUAEF - news - people ), the country's largest coal producer.[6] Turnover was HK$44.8 billion. Belle International Holdings, China's largest maker of women's shoes, confirmed that some of its investors were offering to sell shares in the company.[21] In the third quarter of 2007, BofA missed the consensus estimate by 22.2 percent, and in the fourth quarter it was off by 72.1 percent. It has not yet decided if it will sell the shares on the open market or as a block to a strategic investor. BofA paid $3 billion for its Construction Bank stake in 2005 and has the right to increase its holdings to 19 percent, the report said - although it is obliged to hold its current shares until October.[27] In Australia, the S&P;/ASX 200 index closed lower by 1.6 percent to 5,429.70 points led by the shares of BHP Billiton falling by 2.2 percent to $39, Rio Tinto shedding 4.2 percent to $130. Shares of Woodside Petroleum declined by 3.3 percent to $53, following a report that the firm's quarterly production has gone down more than its expectations. Brambles plummeted by 10 percent to $8 following the news that the world's largest retailer Wal-Mart is planning to stop relying on Brambles' CHEP unit's services and choose other third-party services.[14] In South Korean markets, shares inched up 0.2 percent, while in New Zealand, the NZX 50 index closed lower by 0.3 percent to 3,557 points.[14]
The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, lost 0.58 percent to 12,813.65.[17]
Monday April 21 -Japans Feb Tertiary index -Japans revised Feb leading index of business condition -Australias Q1 producer price index data -Singapores K-REIT Asia Q1 results -Chinas Anhui Conch Q1 results -Hong Kong-listed Brilliance China FY results -Hong Kong-listed China High Speed Transmission FY results -Hong Kong-listed CSR Times FY results -Hong Kong-listed Greentown China FY results -Hong Kong-listed Shimao Property FY results -Hong Kong-listed TSingtao Brewery FY results -Indias Axis Bank FY results -Indias Satyam Computer Services FY results -Indias Tata Consultancy Services FY results -Indias Reliance Industries FY results -ECB annual report; Papademos appears before European Parliament economic and monetary affairs committee in Strasbourg, France -US March Chicago Fed national activity index -US Eli Lilly & Co. Q1 results.[28] Wednesday April 30 -Bank of Japan holds policy board meeting, BoJ governor meets press -Bank of Japan April outlook for economic activity and prices -Japan March unemployment report -Japan March household spending -Japan March industrial output -Japan March housing starts -Japan March construction orders -Reserve Bank of Australia private credit data -Singapore Q1 unemployment -Singapore March money supply data -Singapore March commercial bank lending -Malaysia March money supply -SKoreas March industrial output -Indias Housing Development Finance Corp Ltd. FY results -US April ADP national employment report -US March employment cost index -US Q1 GDP advance -US April Chicago Purchasing Managers Index -US Procter & Gamble Co. Q3 results.[28]
Thursday April 24 -Japan Feb all-industries index -Japan 2-year government bonds auction -Japan weekly capital inflows -Reserve Bank of New Zealand interest rate decision -Caltex Australia AGM -Australias Rio Tinto Ltd. annual general meeting -Singapores STATS ChipPAC Q1 results -Singapores Keppel Corp Q1 results -Indonesias Bank Permata shareholders meeting -Philippine central bank policy meeting -Indias Maruti Suzuki India FY results -Indias HDFC Bank FY results -Indias ACC Q1 results -Indias Hindustan Zinc Ltd. FY results -Euro zone Feb current account -ECB Governing Council meeting; no decision on interest rates -ECB conference in Frankfurt -EU rules on acquisition by GDF, Suez of Teesside Power -EU rules on joint venture between Acea, Pirelli Ambiente -US March revised building permits -US Local Area Personal Income, 2006 -US March advance durable goods -US initial weekly jobless claims -US March help wanted index -US March new residential sales -US March state and local building permits -US April Kansas City Fed manufacturing survey -US 3M Co. Q1 results.[28] Q1 results -Singapore March CPI -Singapores Keppel Land Q1 results -Indonesias Bank Niaga shareholders meeting -Indonesias Global Mediacom shareholders meeting -China COSCO Holdings FY results -Chinas Zhongjin Gold Co. FY results -Chinas Guangdong Electric Power Development FY results -Chinas Huludao Zinc Industry FY results -Chinas FAW Car Co. FY results -Chinas Tianjin Faw Xiali Automotive FY results -Chinas Guangxi Guiguan Electric Power FY results -Chinas Baoji Titanium Industry FY results -Chinas Heilongjiang Agriculture Co. FY results -Taiwan March export orders -Taiwan March industrial output -ADBs Asia Bond Monitor 2008 launch in Mumbai, India -Euro zone provisional April PMIs -Euro zone Feb industrial new orders -EU rules on acquisition by Altor of Stora Ensos Papyrus -EU rules on acquisition by Statoil of ConocoPhillips JET petrol stations -EU rules on acquisition by Colony Capital of Paris Saint-Germain holding co Colfilm stake -US March NAR existing home sales -US Boeing Co. Q1 results.[28]
Q1 results -Hong Kong March CPI -Hong Kong-listed Beijing Media FY results -China Shipping Development Q1 results -Hong Kong-listed Lingbao Gold FY results -Hong Kong-listed Sinoma FY results -Changsha Zoomlion Heavy Industry FY results -Chinas Wuhan Iron & Steel FY results -Chinas Youngor Group FY results -Chinas Pingdingshan Tianan Coal Mining FY results -Taiwan March unemployment -Indias Ranbaxy Laboratories Q1 results -Indias Biocons Q4 results -ECB main refi result -US April Richmond Fed Survey -US Yahoo Inc. Q1 results.[28]
Thursday May 1 -Japan April auto sales -Japan weekly capital inflows -Australias March building approvals data -Australias Westpac Banking Corp. H1 to March financial results -Australias Alumina Ltd. AGM -Australias GPT Group AGM -Australias Woodside Petroleum Ltd. AGM -US March ISM manufacturing index -US March construction spending -US March auto and light truck sales -US Exxon Mobil Q1 results. [28] Wednesday April 23 -Australias Q1 consumer price index data -Australia and New Zealand Banking Group H1 to March financial results -Australias BHP Billiton Ltd. Q3 production report -Australias Santos Ltd. Q1 production report -Australias Zinifex Ltd. Q3 production report -Malaysia March inflation -Nestle Malaysia Bhd.[28]
"There's keen concern about inflation in China, that tightening will continue and that Chinese companies' earnings will be hurt because of the price controls," Lim Chang Gue, who oversees the equivalent of $2 billion in global equities at Samsung Investment Trust Management Co. in Seoul, Bloomberg news report.[14] "While concerns about financial system failure are easing and creating a better investing environment, fears about a deteriorating earnings environment will only grow." With surging commodity prices and sharp gains in a few key stocks whose earnings are derived from Chinese consumption growth, this may lead to a short-term reevaluation in the concept of defensive stock plays. Telecom stocks are traditionally considered defensive by investors, because of their apparent resilience to external market factors such as subprime-mortgage defaults. Such gospel has propelled Chinese telco leader China Mobile into a bubble-like orbit vs. key listings in other sectors.[11]
China financials were mostly higher, with ICBC rising 0.15 hkd or 2.56 pct at 6.02, China Construction Bank up 0.16 hkd or 2.6 pct at 6.32, Bank of Communications 0.32 hkd or 3.19 pct higher at 10.34 and Bank of China up 0.07 hkd or 1.9 pct at 3.76. Oil counters posted sharp gains on news that both PetroChina and Sinopec will receive Chinese government assistance to relieve losses in their oil refining losses and a rebate on value-added tax on oil products.[18] Upstream oil producer CNOOC was up 3.84 pct as crude oil prices rose for the fifth consecutive day last Friday to a record 117 usd a barrel in New York trade. China Southern Airlines surged 5.33 pct after it reported that its 2007 net profit surged 786.12 pct year-on-year to 1.852 bln yuan under Chinese accounting standards.[18] Maanshan Iron was up 0.1 hkd or 2.48 pct at 4.14 after posting 2007 net profit of 2.467 bln yuan, up from 2.395 bln a year earlier. Gome Electrical Appliances was up up 0.48 hkd or 2.66 pct at 18.52 after it said its net profit rose 38 pct year-on-year to 1.13 bln yuan, boosted by strong demand for electrical appliances and consumer electronics products. Shui On Land (OOTC:SOLLF) was up 0.03 hkd or 0.42 pct at 7.19, while China National Building Material was down 1.36 hkd or 7.96 pct at 15.72 after their 2007 results.[16] Sinotruk rose 0.17 hkd or 2.19 pct to 7.94 after it reported a 2007 net profit of 1.11 bln yuan against 638 mln a year earlier.[18]
Among local banks, Hang Seng Bank was up 1.0 hkd or 0.68 pct at 147.8, Bank of East Asia lost 0.6 hkd or 1.4 pct to 42.35, and BOC Hong Kong was up 0.16 hkd or 0.82 pct at 19.56. Pacific Century Premium Developmet was up 0.05 hkd or 1.81 pct at 2.81 hkd as it resumed trading after its minority shareholders voted down the proposed privatization offer by parent PCCW Ltd yesterday. [16] A couple of strong days in the Hong Kong market at the end of last week and another good one yesterday, when the Hang Seng Index gained 1.6%, has likely helped. Although still somewhat volatile, the index has is now 15% above its lows from mid-March.[10] In Japan, the Nikkei gains 252 points, or 1.9%, while the Hong Kong Hang Seng rises 381 points, or 1.6%.[11] "The Hang Seng's range is getting tighter, at 23,700 to 25,000," says Steven Wong, a trader at Daiwa Securities SMB in Hong Kong.[11]
"Renewed speculation that the company will benefit from a sector restructuring also boosted the stock," said Francis Lun, general manager at Fulbright Securities. "Stripping out the contribution from China Mobile, the Hang Seng should have fallen amid weak Shanghai stocks," he added.[17] The Hang Seng fell 1.9%, snapping a three-week wining streak, but the index's largest component, China Mobile CHL, surged 4.4%.[11]
Index heavyweight China Mobile (nyse: CHL - news - people ) rose 2.6 percent to HK$132.30 and China Overseas Land gained 1.9 percent at HK$14.84.[21] Bucking the trend among locally-listed Chinese heavyweights, China Mobile finished up 1.9 percent at HK$131.50.[20]
China Eastern Airlines was 3.2 percent lower at HK$3.01. The Chinese authorities fined the country's third-largest carrier 1.5 million yuan Thursday and stripped it of some routes in Yunnan province because of strikes held by its pilots, The Standard reported Friday. Certain Chinese banks extended their decline following the increase in the reserve requirement for bank deposits.[21]
The World War II period feature stars John Cusack, Gong Li, Ken Watanabe and Chow Yun-Fat and promised to be another step in easing cultural trade between Hollywood and the Asian giant. How could Weinstein rail against a regime that is inscrutable and impervious to criticism, bullying, haranguing or other show-business tactics? He couldn't. He politely offered his respect to China and went location-scouting in Hong Kong, Vietnam, Malaysia and Thailand. Weinstein had to pull his punches because he has raised a $US285 million ($310 million) fund devoted to making films in Asia starring local actors. Upsetting China so early would send all the wrong signals as he tries to make that cash pile work. What signals would work in China? Its move to pull the film permit from Shanghai, and for six other upcoming Western films, was an imperious reaction to the controversy surrounding Ang Lee's film, Lust, Caution. That was filmed in China but couldn't be shown there in full because of two explicit -- by Chinese standards, at least -- sex scenes.[29] The H-shares of China Shenhua Energy dropped 2.4%, to close at 34.15 Hong Kong dollars ($4.38).[6]
Among utilities, Hong Kong China Gas was up 0.4 hkd or 1.84 pct at 22.1, Cheung Kong Infrastructure was up 0.15 hkd or 0.46 pct at 33.1 and PCCW was up 0.07 hkd or 1.4 pct at 5.08.[16] Among utilities, CLP Holdings gained 0.60 hkd or 0.94 pct at 64.50, while Hong Kong China Gas was up 0.15 hkd or 0.69 pct at 21.85.[23] Among large-caps, HSBC gained 1.70 hkd or 1.3 pct at 132.40, Hong Kong Exchanges and Clearing was up 4.20 hkd or 3. pct at 144.20, China Life gained 1.30 hkd or 4.52 pct at 30.05 and Hutchison Whampoa was up 1.20 hkd or 1.59 pct at 76.70.[18]
Dealers said the local market was also pressured by profit-taking in large caps, including HSBC, following recent gains and sharp declines in airline counters as crude oil prices remain at record levels. PetroChina fell 2.77 pct as poor sentiment towards the oil producer in Shanghai spilled over to its H-shares in Hong Kong.[23] Even more embarrassing was the flood of mainland Chinese citizens who went to Taiwan or Hong Kong to see the film. Consequently its young star, Tang Wei, was black-listed by the Chinese Government, although her co-star, Tony Leung, is too big a name to be censured. Other events have rattled Chinese authorities, including the Tibetan uprising and a Shanghai music concert in which Icelandic singer Bjork shouted "Tibet! Tibet!" at the end of one song.[29]
Three years ago, Beijing invited five directors -- Giuseppe Tornatore from Italy, Majid Majidi from Iran, Patrice Leconte of France, Daryl Goodrich of Britain and Hong Kong's Andrew Lau Wai Keung -- to make a short film each, telling a story concerning the preparation for the Olympics. They have just screened on China Central TV. The results of different cultural eyes training their sights on the China experience will be interesting. You would hope it's not the last example of it.[29] Air China AIRYY plummeted the maximum daily limit of 10%, to 12.26 yuan, while in Hong Kong, Cathay Pacific CPCAY gained 0.7% to HK$15.42.[2] Next week, the Hong Kong market is expected to maintain volatile trade amid a stream of economic data and corporate announcements coming out of the United States and China.[20] Hong Kong's economy "is simultaneously influenced by the U.S. and China", Ms Lin says.[3] "Overall sentiment in Hong Kong is not bad because overseas markets, including Wall Street, were fine despite Merrill Lynch's third consecutive quarterly loss after a 6.5 billion U.S. dollar subprime-related writedown," Yiu said.[19] 'Overall sentiment in Hong Kong is not bad because overseas markets, including Wall Street, were fine despite Merrill Lynch's (NYSE:MER) (OOTC:MERIZ) third consecutive quarterly loss after a 6.5 bln usd subprime related writedown,' Yiu added.[23]
While concerns about financial system failure are easing and creating a better investing environment, fears about a deteriorating earnings environment will only grow," says Tim Rocks, chief Asia strategist at Macquarie Bank in Hong Kong.[2] Financials also lost ground in Hong Kong trading, as mainly long-only foreign funds unloaded positions in banks and insurance companies after a strong rally recently.[2]
In Hong Kong, PetroChina closed down 2.8 percent at HK$9.82. 'Its just an erosion of confidence.[20] The demand for fine wine in Asia has sent the price of the best French vintages to new highs as buyers in Hong Kong take advantage of the territory's recent scrapping of high import tariffs.[24] BEIJING (XFN-ASIA) - China Reinsurance (Group) Co said it has launched a representative office in Hong Kong.[26] Alibaba.com ALBCF, another tech stock listed in Hong Kong, has lost 5.6% in the same period that Baidu has jumped.[11]
The Hang Seng index was up 15.76 points or 0.1 percent at 24,274.72, with some Chinese stocks providing support.[21] The Hang Seng Mainland Composite Index went down 23.38 points, or 0.52 percent, to close at 4,444.27.[15] The Hang Seng China-Affiliated Corporations Index added 56.25 points, or 1.01 percent, to close at 5,603.15.[15]
Shenhua Energy dropped 85 cents, or 2.4 percent, to HK$34.15 and posted the fifth-largest drop on the Hang Seng Index.[8] The benchmark Hang Seng Index opened up 2.58 percent at 24,821.00 with Ping An Insurance (2318.HK: Quote, Profile, Research ) and contracted handset maker Foxconn International (2038.HK: Quote, Profile, Research ) leading the blue-chip rally.[25] As of 0326 GMT, the blue-chip Hang Seng Index.HSI had edged up 0.29 percent to 24,328.21 after opening down 0.10 percent.[1]
At 10.55 am, the Hang Seng index was up 687.84 points or 2.84 pct at 24,885.62, off a low of 24,756.72 and high of 24,887.11.[18] Hang Seng Index, the benchmark, opened slightly lower at 24,234.53 points in the morning session.[5] The benchmark Hang Seng Index.HSI lost 61.18 points to finish at 24,197.78.[12] The Hang Seng Index shot up 46.5 per cent to 31,638.22 points in just over two months after details of the plan were announced on August 20.[3] After fluctuating between 24,107.24 and 24,400.87 points, the blue-chip Hang Seng Index dipped 61.18 points, or 0.25% to 24,197.78 points.[5] The Hang Seng index closed down 61.18 points at 24,197.78, off a low of 24,107.24 and a high of 24,400.87.[19]
In Japan, the Nikkei 225 Average closed higher on Friday by 78 points or 0.58 percent at 13,476 points and the broader Topix index moved higher by 0.8 percent to 1,304 points, led by the shares of Bull-Dog Sauce rising by 5.8 percent to $2. [14] Shanghai shares tumbled on Friday, with the main index falling as much as 4.49 percent at one point to a fresh 12-month low of 3,078.17 before closing the morning down 2.09 percent.[17]
Mainland's benchmark Shanghai Composite Index ended down 4 percent, or off 105.9 points, at 3,094.67.[4] The Shanghai Composite Index closed 4 percent down to 3,094.668 points, which is the lowest point since March 2007.[14]
While the U.S. markets are exporting gains to the Nikkei and specific Chinese consumption-related equities, China's Shanghai Composite Index is dropping like a stone.[11]
Yiu predicts that trade next week will depend to a large extent on the Shanghai market's performance. 'If foreign markets remain firm next week and the Shanghai bourse stops its decline and bounces back, our market may test the resistance level at 24,600 points,' he said. 'If it surpasses this level, the next resistance level will be at the 25,000 points level,' he said. 'Investors, of course, will be wary of Citigroup's (NYSE:C) first quarter results and the amount of writeoffs that it will make for its subprime exposure,' he said. 'It is worth noting that while major U.S. banks have continued making writeoffs for their subprime investments, those writeoffs have come in line with expectations and have not really unnerved investors,' he said.[23] Investors retreated to the sidelines after a wider than expected loss for the first quarter from Merrill Lynch (nyse: MER - news - people ) and a lackluster performance on the Wall Street overnight.[6] 'The mixed performance on Wall Street and news of cash calls have made investors cautious,' said Peter Lai, investment manager at DBS Vickers. The Dow Jones Industrial Average ended flat overnight because of weak U.S. economic data and weaker-than-expected results from Merrill Lynch (nyse: MER - news - people ), which posted its third consecutive quarterly loss.[21]
Investors also were preoccupied with pending earnings results from Citigroup (nyse: C - news - people ), which was expected to report a quarterly loss of as much as $5 billion.[6] Wall Street's gains came as Citigroup and Google Inc's first-quarter earnings results eased investor worries over the health of America's largest corporations.[18]
Selling blocks on Thursday are still showing investor eagerness to offload, given the opportunity." While economic data from China this week showed that retail sales are rising at a healthy pace, inflation is still far from under control at 8.3% for March. That may translate into unaccounted-for pressure on earnings going forward, analysts say.[11]
'China's stock markets are still under selling pressure due to high inflation,' said Alex Tang, research head at Core Pacific-Yamaichi. Earlier this week China raised the reserve requirement for bank deposits to the highest on record and most analysts are expecting the authorities to raise the benchmark one-year interest rates further. Last year, China increased its rates six times.[21] BofA is looking to exercise an option in its contract with China Construction Bank that allows it to buy more shares in the bank at below market rates. The two actions will allow BofA to maintain a foothold in the burgeoning China market while at the same time reinforcing its cash reserves to offset subprime-related writedowns that are expected to be in the neighborhood of $3.5 billion.[27] It is reported that shares in China's Jinduicheng Molybdenum rose 24% in their Shanghai debut after Asia's top molybdenum producer raised CNY 8.9 billion as investors were lured by strong prospects for demand for the metal. Jinduicheng issued 538 million shares, or 20% of its expanded capital.[7]
Mainland shoemaker Belle International dropped more than 3 pct and China's top coal producer China Shenhua Energy lost more than 2 pct after share placement news.[16] China Re, which has an over 80 pct share of the country's reinsurance market, booked 2007 operating revenue of 44.466 bln yuan, up 47.8 pct. It has property insurance, asset management, and insurance brokerage businesses, apart from core reinsurance operations.[26]
PetroChina was down 0.22 hkd or 2.18 pct at 9.88, China Shenhua was down 0.9 hkd or 2.57 pct at 34.1 and Belle lost 0.29 hkd or 3.54 pct at 7.9. Other oil firms were mixed, with CNOOC up 0.02 hkd or 0.15 pct at 13.4 and refiner Sinopec (NYSE:SNP) down 0.03 hkd or 0.41 pct at 7.34 as international crude prices stay above 115 usd a barrel on the back of a weakening U.S. dollar that has helped drive a series of record highs.[16] Mainland banks were mostly lower after yesterday's gains, with China Construction Bank (OOTC:CICHF) down 0.05 hkd or 0.78 pct to 6.36, Bank of Communications 0.04 hkd or 0.39 pct lower at 10.14, China Merchants Bank down 0.15 hkd or 0.52 pct at 28.55 and ICBC up 0.06 hkd or 1.02 pct at 5.94.[16] Mainland property plays were sharply higher, with Agile Property surging 0.40 hkd or 4.88 pct to 8.59, Guangzhou R&F; rising 0.44 hkd or 2.43 pct to 18.58 and China Overseas Land up 0.48 hkd or 3.27 pct at 15.14.[18]
China Southern Airlines surged 0.22 hkd or 4.89 pct to 4.72 after reporting strong earnings last year. Yanzhou Coal Mining Co Ltd gained 0.74 hkd or 6.41 pct at 12.28 after it reported a 36 pct year-on-year rise in its 2007 net earnings.[18]
China's demand for gold jumped 23 percent in 2007, making it the world's second-largest consumer, as a booming economy spurs jewelry purchases. Zijin posted a 50 percent gain in 2007 profit on March 7 and said it plans to raise production 9.6 percent this year to meet demand and benefit from higher prices.[13] The airline carried 13.98 million passengers in the first three months, 11.2 percent more than a year ago. Separately, China Southern Airlines said its Xiamen Airlines unit will acquire 20 Boeing B737 series aircraft at $75 million each. Other airlines were also higher.[9] Charlotte-based BofA is forecast to earn 41 cents per share in the first quarter, down 65 percent on year when it earned $1.17 per share but up by 87 percent on quarter when it reported 5 cents per share.[27] Shares in Lenovo, the world's No. 4 personal computer maker, rose 2.2 percent after IDC reported on Thursday that PC shipments worldwide rose 14.6 percent in the first quarter, above previous estimates.[1]
The company is expected to post earnings growth of 33 percent to 23.4 billion yuan in the first quarter of 2008, according to JP Morgan.[20] The government hasn't made any market-boosting moves like cutting stamp duties, and on the other hand, people are still very worried about further credit tightening measures,' said Howard Gorges, vice-chairman with South China Securities. Earlier this week China said its economy grew by 10.6 percent in the first quarter, slowing from the 11.4 percent rate achieved in 2007 but still maintaining a strong pace of growth.[20]
HSBC Holdings declined 0.2 percent to HK$130.70. Chinese PC maker Lenovo (OOTC:LNVGY) Group extended its gains on Friday following a sharp rally in the previous session driven by strong PC shipments in the first quarter of 2008.[20] Lenovo's PC shipments increased at a faster-than-market rate of 21 percent in the first quarter, according to data released by IT advisories Gartner and IDC. Worldwide PC shipments grew 14.6 percent in the January-March period.[20] 'Attention will also be focused on U.S. economic data, first quarter gross domestic product figures. Most people have already discounted the first quarter GDP data (as). not good, but they hope to see improvements in the second quarter as the government's economic stimulus measures begin to take hold,' he said. (1 usd = 7.8 hkd) [email protected] jc/kmq - xfnjcc/xfjamesa/xfnjcc/xfnkm Copyright Thomson Financial News Limited 2008.[23] "China's inflation risk could give way to growth risk within months," writes Hong Kong-based Citigroup economist Yiping Huang in a research note. "The first-quarter GDP data, which slowed to 10.6%, from 11.2% in the previous quarter, offers the first piece of evidence of such downside risk."[11]
Bigger rival China Life Insurance firmed 0.3 percent to HK $29.15 after the company reported first-quarter premium income of 102.2 billion yuan. It gave no comparative figures. [21] Turnover was HK$79.89 billion. Mainland stocks plummeted as oil major PetroChina fell below its IPO price of 16.70 yuan, spreading panic signals among investors.[20] The stock dipped below the HK$6.20 IPO price during intraday trading at one point in March but has recovered and is now well above that, although yesterday's close is still 37% below the record high of HK$13 in early November. For investors who believe the stock will return to those levels this was obviously a great buying opportunity.[10]
Despite surging commodity prices, related shares failed to perform. PetroChina PTR slipped 2.8% to HK$9.82 on news that its mainland-listed A-shares fell below their IPO price of 16.70 yuan. [2] Australia's S&P;/ASX 200 suffered a decline of 1.6%, to 5,429.70, owing primarily to softening prices for oil and other commodities. Logistics service provider Brambles (other-otc: BMBLF - news - people ) was hammered on worries about losing business from a substantial client, the world's top retailer, Wal-Mart (nyse: WMT - news - people ), after Wal-Mart announced a review of its sourcing of pallets from the firm. Its shares tumbled by 10.3%, to 9.00 Australian dollars ($8.44).[6] Shares in mainland Chinese airlines plunged Friday after crude oil prices stayed above $115 per barrel in Asian trade, raising concern about higher fuel costs and weakened profits.[20]
Dealers said the local market was also pressured by profit-taking in large caps, including HSBC, following recent gains and sharp declines in airline counters as crude oil prices remain at record levels. Analysts said they expect further near-term weakness in the benchmark index, tracking declines in mainland's bourses, though they said the losses will likely be limited, with 23,500 providing strong support.[4]
Taiwan's share prices closed lower Friday, with the weighted index falling 16 points to close at 9,074.[30] Japanese share prices closed up 0.58% on Friday, extending a rebound to a fourth day.[30]
In the financial industry, shares of National Australia Bank dropped by 2.1 percent to $25, ANZ Banking shed as much as 3.2 percent to $18, followed by shares of Commonwealth Bank of Australia declining by 1.9 percent to $38. [14] Shares in Air China Ltd., the nation's largest international carrier, slumped 5.8 percent to HK$5.20.[20] Shareholders of the nation's largest coal producer had sought to raise HK$690 million (US$89 million) from the sale of 20 million shares at HK$34.10 to HK$34.50 apiece. Belle retreated 20 cents, or 2.4 percent, to HK$8, its lowest close since April 1.[8] A combined 710.8 million existing shares were offered at HK$7.50 to HK$7.80 each.[8]
The company's pre-initial public offering stakeholders, including private equity funds, want to raise as much as HK$5.54 billion selling the company's shares.[8] Zijin plans to use 4.9 billion yuan from the sale proceeds for acquisitions and mining projects, it said in a share sale document on April 7.[13]
Belle listed in May last year following a highly popular IPO that raised $1.3 billon. This was the first sizeable block of shares on offer since then.[10] Shanghai Electric Power lost 5.9%, to 5.74 yuan (82 cents), after the power company estimated Friday it would incur a loss of about 120 million yuan ($17.2 million) in the first three months of the year.[6]
BofA is the second-largest bank in the U.S. by assets behind Citigroup and boasts the country's most extensive branch network. In the past year, its revenues were $119.2 billion and its net income totaled $14.9 billion. Its EPS growth forecast for the year is -0.9%, which is slightly better than the banking industry average.[27] The entire 9 percent in the Chinese bank could be worth more than $15 billion.[27]
China Construction Bank was 0.8 percent lower at HK$6.36, China Merchants Bank dipped 0.5 percent to HK$28.55 and Bank of Communications lost 0.5 percent at HK$10.14.[21] Aluminum Corp. of China (nyse: ACH - news - people ) (Chalco) slipped 1.9 percent to HK$12.16.[21] China Southern Airlines (NYSE:ZNH), the mainland's largest airline by fleet size, plunged 6.8 percent to HK$4.50.[20] China Southern Airlines, the nation's third-largest carrier, rose 3.1 percent to HK$2.99.[9] Belle International slid 2.4 percent to HK$8 and China Shenhua also dropped 2.4 percent to HK$34.15.[20] China's bigges insurer China Life Insurance rallied 4.5 percent to HK$30.05.[9] The nation's biggest life insurer China Life fell 1 percent to HK$28.75.[20]
Aviation stock Air China was down 5.8 percent, China South Air down 6.83 percent and China East Air down 6.75 percent.[4] The stock was up 1.4 percent at HK$6 after gaining 5.9 percent on Thursday.[20]
'The Chinese government is trying to save the mainland stock market,' said Castor Pang, strategist at Sun Hung Kai Financials.[9] Some Chinese financial stocks also took a hit following losses on the mainland markets.[20]
Airlines, oil companies and financial stocks led the benchmark index higher.[9] Utilities were mostly higher, offsetting some profit-taking in China financials and providing some support to the key index.[16]
Among airlines, Air China slipped 0.32 hkd or 5.8 pct to 5.20, China Eastern fell 0.21 hkd or 6.75 pct to 2.90 and China Southern was down 0.33 hkd or 6.83 pct at 4.50. [23] Among China insurers, Ping An was off 1.50 hkd or 2.44 pct at 59.95 and PICC PC was down 0.13 hkd or 1.94 pct at 6.58.[23] Among large-caps, HSBC shed 0.30 hkd or 0.23 pct at 130.70, China Life lost 0.30 hkd or 1.03 pct at 28.75, HKEx was down 2.80 hkd or 1.96 pct at 140 and Hutchison Whampoa was down 0.20 hkd or 0.26 pct at 75.50.[23] Belle International lost 0.20 hkd or 2.44 pct at 8.0, while China Shenhua was 0.85 hkd or 2.43 pct lower at 34.15.[23]
Sun Hung Kai (OOTC:SGKAF) was down 0.5 hkd or 0.39 pct at 126.6, Cheung Kong was down 1.2 hkd or 1.03 pct at 114.9, Henderson Land was down 0.05 hkd or 0.09 pct at 56.75, and Hang Lung Properties was up 0.2 hkd or 0.67 pct at 29.85.[16]
"Hong Kong is a very speculative city," says Tao Lin, an assistant professor in the faculty of business and economics at the University of Hong Kong.[3] Stories like this are common in Hong Kong, where everyone from the business executive to the man on the street seems to have something to say about the markets.[3] "City boys in Hong Kong are saying: 'We can get our wine in for nothing now'," Mr Staples said.[24]
Fine wine prices have soared over the past year as increasingly wealthy consumers in Asia and Russia start collecting wine. Prices have also been driven up as new investors, such as hedge funds and investment banks, come into the wine market. [24] The remaining two recommend investors to "hold". Their average target price is HK$10.44, implying a 26% upside from yesterday's close.[10]
Some London-based traders are finding the U.S. a good source of wines as the credit squeeze puts financial pressure on some collectors.Stephen Williams, chief executive of Antique Wine, said the U.S. had become "a major source market" over the past six months.Mr Williams recently sold a collection of Domaine de la Romane-Conti, mostly bought from a U.S. client, to a Chinese investor for $500,000.[24] Bullion soared to a record $1,032.70 an ounce on March 17 as a falling dollar and declining global equities led investors to buy alternative assets.[13]
Investors are hopeful that the company's foray into 3G networking will be successful and will eventually become a major revenue stream for China's biggest wireless carrier.[20] Asia's biggest oil and gas company said it will receive a subsidy from China's Ministry of Finance starting April 1 due to losses from higher refining and processing costs of imported crude oil. It also expects to get a refund in the second quarter of the value-added-taxes it has paid.[9] CNOOC, China's largest offshore oil producer, was up 1.2 percent and Sinopec Corp, the largest oil refiner in China, went up 0.14 percent.[4] CNOOC Ltd., the country's biggest offshore oil producer, was 4.4 percent higher at HK$14.16.[9]
PetroChina lost 0.28 dollars or 2.77 percent at 9.82, but other oil counters gained as international crude prices stay above 115 U.S. dollars a barrel on the back of a weakening U.S. dollar that has helped drive a series of record highs.[19] Runaway prices of food and commodities have pushed inflation higher, driving the CPI up 8.3 percent in March.[20]
ICBC was down 0.17 percent, CCB down 3.9 percent, Bank of China down 1.34 percent, Bankcomm down 1.57 per cent, CM Bank down 1.39 percent and CITIC Bank flat.[4] The government responded immediately by raising the reserve requirement rate for banks by 50 basis points to a record 16 percent.[20]
The H-Financials Index, initiated on Nov. 27, 2006, readjusted on Sept. 10, 2007, tracks the performance of nine major banks and insurers of the Chinese mainland.[15] The index tracks the performance of 31 locally listed companies with a significant equity interest held by entities in the Chinese mainland.[15]
The index earlier was up at 24,400.87 before major Chinese counters turned lower, tracking the retreat in Shanghai markets.[20] On the mainland, the Shanghai Composite index sank almost 4.0%, to 3,094.67.[6]
Local property firms were mixed, with the sectoral index down 22.22 points or 0.19 pct at 29,878.96.[16]
Which makes the decision by the Chinese Government last month to cancel Weinstein's permit to shoot "an Asian Casablanca" -- the new film Shanghai -- in China all the more intriguing. [29] 'Problems linger in the banking sector in the U.S. and Europe, and any fresh negative news can pressure our market,' Gorges noted. 'In China, worries will remain on the possibility of more tightening measures being adopted in future in the face of high inflation,' he added.[18]
China Mobile's performance far exceeds rivals China Telecom CHA, China Unicom CHU and China Netcom CN, which are all trading in negative territory for the month.[11] In the past month, China Mobile has soared 27% vs. gains of just 6.7% in PetroChina PTR and 7.4% in HSBC Holdings HBC, for example.[11]
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. [12] U.S.-listed Chinese Internet search engine Baidu.com BIDU has caught a variety of the same fever: in the last month, Baidu has soared a whopping 64.3%. While bulls argue that the defensive stocks that feed off Chinese consumption growth were deeply undervalued at previous levels, the gains in these sector leaders outflank their rivals by any count.[11]
Further credit tightening there continues to weigh on mainland shares, which also affects Chinese firms listed here,' said DBS' Lai. 'Such concerns will add to the volatility of trading next week,' said Lai.[21] The total block represented 56 days worth of trading, based on the average daily trading volume in the past six months, and the 350 million shares that went to institutional investors would have taken the equivalent of 28 days to sell in the open market.[10] According to investors, the portion of the deal that was sold to the market appeared to have been more than four times covered. One explanation for the popularity is that this was a big liquidity event in Belle, accounting for 8.4% of the share capital and 44% of the free-float.[10]
"Investors in Tokyo actually don't want the market to gain too much today because after Citi's earnings the market could rally on short-covering," Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co., was quoted by Reuters as saying. "While Citi is expected to report bad earnings, it probably has plans to boost its capital, and potential rescue plans might have been discussed at the Group of Seven meeting."[6] Traders were influenced by concerns over weak earnings reports, high oil prices and the growth of drugmakers.[14]
EPS forecast $0.81 versus $0.74 -US Time Warner Inc. Q1 results. [28] In total, the three pre-IPO shareholders sold 710.755 million shares, with 350 million shares ($345 million) going to the market and 360.755 million to the management shareholders.[10] The majority of the shares, or 490.755 million of them, were sold by a company wholly owned by Bell chairman Y Tang.[10]
Holding a vested interest in the world's fastest-growing economy has clear advantages and disadvantages, and in the coming week investors in traditionally defensive Chinese plays may see more of the latter than they have been accustomed to in recent weeks. [11] On a scale of 0 to 200, investor sentiment plunged from 148 in the fourth quarter last year to a neutral rating of 107 last quarter.[3]
Zijin's net income has grown 79 percent on average in the past five years, according to Bloomberg data.[13]
SOURCES
1. News of Neftegaz.RU | PetroChina, Shanghai Electric, Lenovo: Stocks Review
2. Stocks Fall in Shanghai, Hong Kong | World Markets | ACH BACHF CHL HBC KBSTY NTDOY PTR - TheStreet.com
3. SCMP.com - the online edition of South China Morning Post, Hong Kong's premier English-language newspaper
4. HK stocks close lower on Chinese mainland markets' fall_English_Xinhua
5. Untitled
6. Mainland China Markets Plumb Fresh Lows - Forbes.com
7. SteelGuru - News
8. Hong Kong has its first weekly fall in a month -- Shanghai Daily | '''''''''''' -- English Window to China News
9. Hong Kong shares higher on easing credit crisis worries, China move - UPDATE - Forbes.com
10. Hong Kong's IPO Market on the Upswing
11. Asia: Redefining Defensive China Stocks | World Markets | BACHF CHL CN GOOG HBC PTR SKM - TheStreet.com
12. HK shares ease on weak China mkt, China Mobile up | Industries | Financial Services & Real Estate | Reuters
13. Bloomberg.com: Asia
14. Asian Stocks Fall Led By Shanghai Markets, Higher Oil Prices | April 21, 2008 | AHN
15. China Enterprises Index down 1.65%_English_Xinhua
16. Hong Kong shares end morning flat in cautious trade - UPDATE
17. HK stocks steady, China Mobile up ahead of earnings | Industries | Financial Services & Real Estate | Reuters
18. Hong Kong shares higher on Wall St rally, China market boost - UPDATE - Forbes.com
19. Macau Daily Times - Hong Kong shares close lower dragged down by Shanghai
20. Hong Kong shares close lower on Shanghais steep losses, share placements UPDATE
21. Hong Kong shares end morning flat after mixed Wall St, share placements -UPDATE - Forbes.com
22. China Zijin Mining raises $1.43 billion in Shanghai IPO- Global Markets-Markets-The Economic Times
23. Hong Kong shares close lower on Shanghais fall; PetroChina down 2.77 pct-UPDATE
24. Asia's thirst for wine benefits exporters:wines-info
25. HK stocks jump on Beijing measure, Ping An surges | Industries | Financial Services & Real Estate | Reuters
26. China Re opens Hong Kong representative office - Forbes.com
27. RTTNews - Global Business News, Business Newswires, Business Articles, News Analysis.
28. Asian economic and business calendar -- to May 5 | Latest News | News | Hemscott
29. Hidden dragon | The Australian
30. Radio Taiwan International
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