China Stocks Fall; Properties Boom Curbed

Mayank Mehta, Chandrasekhar Atreya and Darlington Musarurwa
06 May, 2010
New York City

Hua Xia Bank Co to raise 20.8 billion yuan. PetroChina starts expansion of Ningxia oil refinery. Ping An plans to acquire Shanghai securities.

[R]10:35 PM Hong Kong, China – Hua Xia Bank Co to raise 20.8 billion yuan. PetroChina starts expansion of Ningxia oil refinery. Ping An plans to acquire Shanghai securities.[/R]

Chinese benchmark index fell to a seven month low as stocks declined on concern of European debt crisis and government curbs on property will halt economic growth.

China introduced tax exemption for air and shipping lines from January 1, covering both overseas passenger and cargo services, according to a Ministry of Finance statement. Air China, the nation’s largest international carrier will be the biggest beneficiary as it gets about 50% sales from overseas flights.

Air China Ltd said in a Hong Kong Stock Exchange statement late yesterday, it could save up to 549 million yuan for the year based on 2009 earnings. Cosco Shipping Co, a unit of China’s largest shipping group predicted 42 million yean savings on a similar basis.

Hong Kong stocks declined, dragging the benchmark index to its longest losing streak in 14 weeks on heightening concerns of European debt crisis spreading after Moody’s Investors Service said it was reviewing Portugal’s credit rating.

PSA Peugeot Citroen, France’s largest carmaker and China Changan Automotive Group Co signed an agreement today to set up a venture in China to tap the rising demand for vehicles in China.

The venture will make environmentally friendly light commercial and passenger vehicles, said Changan in a statement today. The companies are still to finalize the details of the venture, the statement said.

Peugeot is adding to the existing Chinese partnership with Dongfeng Motor Group Co. The new venture will not be competing directly with the existing venture, the statement said.

Hang Seng index in Hong Kong decreased 194.13 or 0.96% to 20,133.41 and CSI 300 index in China lower 139.54 or 4.60% to 2,896.86.

Shanghai Movers

Air China Limited decreased 2.7% to 13.02 yuan after the international carrier said it may save 549 million yuan ($80 million) as a result of the tax exemption.

China Vanke Co., Ltd fell 3.6% to 6.90 yuan after the listed developer posted higher property sales in April.

COSCO Shipping Co., Ltd declined 4.7% to 8.69 yuan after the shipping group said first quarter net profit decreased 40.5%.

Hua Xia Bank Co., Limited plunged 9.9% to 11.45 yuan after the bank announced that it plans to issue up to 1,859,197,460 A shares of common stock, at a price of 11.17 yuan per share in private placement. The Company expects to raise up to 20.8 billion yuan from the issue.

Jiangxi Copper Company Limited decreased 4.2% to 30.98 yuan.

PetroChina Company Limited dropped 3.6% to 11.49 yuan after the oil company started construction to more than triple the capacity of its Ningxia refinery at a cost of 7.4 billion yuan ($1.1 billion) ato cater to fuel demand in northwestern China.

Poly Real Estate Group Co., Ltd the developer declined 5.3% to 10.82 yuan.

HK Movers

Datang International Power Generational Co. Ltd dropped 1.6% to HK$3.04 after China’s economic planning agency said it approved a project by Datang Power to convert coal to natural gas.

Evergrande Real Estate Group Limited plunged 10.0% to HK$2.61.

Ping An Insurance (Group) Company of China, Ltd declined 2.5% to HK$61.55. The company plans to acquire Shanghai Securities Co to strengthen its brokerage business in a deal analysts estimate is worth 7 billion yuan ($1 billion), the 21st Century Business Herald said on Thursday.