China Stocks Fall; FDI Climbs

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

Hong Kong shares fall across the board. Goldwind receives the H-share initial public offering. Qatar Petroleum, Shell and Petrochina sign new exploration and production sharing agreement. Beiqi Foton plans to build a new unit in Shandong. Evergrande is set to extend discounts.

[R]5:00 PM Hong Kong, China – Hong Kong shares fall across the board. Goldwind receives the H-share initial public offering. Qatar Petroleum, Shell and Petrochina sign new exploration and production sharing agreement. Beiqi Foton plans to build a new unit in Shandong. Evergrande is set to extend discounts.[/R]

China stocks fell and yuan forwards dropped most in a week on concern government measures to cool property speculation and steps by Europe to contain fiscal deficits will curtail economic growth, driving the benchmark index to a one-year low.

China’s stock market fall shouldn’t be blamed on index futures that started trading in Shanghai on April 16, said China Securities Journal citing Wang Lianzhou, the former deputy director of National People’s Congress’ financial and economic committee.

Foreign direct investment in China climbed 24.7% in April from a year earlier to $7.35 billion as the government relaxed rules to lure investors, the Commerce Ministry said on its Web site on May 16.

Foreign-invested companies accounted for 28% of the nation’s industrial output and 56% of exports in 2009 and directly employed 45 million people, according to government data.

PetroChina Co, the nation’s biggest oil producer, signed an exploration and production agreement with Qatar Petroleum and Royal Dutch Shell Plc today the Chinese company’s public relations agency said on May 16.

China Mobile Ltd, the world’s biggest carrier by market value, will look for acquisitions in emerging markets to expand overseas operations even though the company doesn’t have specific targets, said Chairman Wang JianZhou at the ICT and Urban Development conference in Ningbo on May 16.

Growth in China may have peaked as developers accelerated construction work ahead of measures by government to cool the property market, according to New York-based research organization, The Conference Board.

Bill Adams a Beijing-based economist for The Conference Board said ‘China’s expansion is unlikely to accelerate further through the summer as developers may have been frontloading projects in anticipation of controls on the real estate market.’

GCL-Poly Energy Holdings Ltd, China’s largest producer of polysilicon, the main raw material used in solar cells, is also considering setting up solar farms in the US, Europe and the Middle East and may make some investment decisions on some projects this year, said the company’s CFO Sam Tong at a media briefing in Hong Kong today.

The company completed its first 20-megawatt solar plant in China in December.

Hang Seng index in Hong Kong decreased 430.23 or 2.14% to 19,715.20 and CSI 300 index in China lower 153.31 or 5.35% to 2,714.72.

Shanghai Movers

Beiqi Foton Motor Co., Ltd dropped 4.7% to 17.08 yuan after the commercial vehicle producer a subsidiary of Beijing Automotive Industry Holding, plans to build a new plant in Weifang, East China''s Shandong Province with an initial investment of 795 million yuan or $116.4 million, the company said Saturday in a statement.

China Vanke Co., Ltd, the listed developer, dropped 3.0% to 7.09 yuan.

Guangdong Electric Power Development Co fell 0.7% to 6.30 yuan after the operator of power plant said it will invest a further 303 million yuan in a shipping unit alongside other shareholders to boost the unit’s capital, the company said.

Industrial and Commercial Bank of China Limited slipped 2.2% to 4.42 yuan after the lender has selected four banks to handle its Shanghai fundraising, sources said on Friday, in a deal aimed at raising 25 billion yuan ($3.7 billion).

Nanjing Tanker Corporation rose 1.8% to 5.54 yuan.

PetroChina Company Limited dropped 2.2% to 10.90 yuan after the oil producer reported Qatar Petroleum on behalf of the Government of the State of Qatar has signed today a new exploration and production sharing agreement with Shell and PetroChina Company Limited for Qatar Block D.

Poly Real Estate Group Co., Ltd dropped 5.0% to 10.35 yuan.

Xinjiang Goldwind Science & Technology Co., Ltd rose 0.1% to 21.90 yuan after the company won approval from the China Securities Regulatory Commission to issue 454.59 million shares in an H-share initial public offering in order to raise $2 billion, reports 163.com, citing a company filing.

Xi''An Aircraft International Corporation the aircraft manufacturer fell 3.9% to 11.56 yuan.

HK Movers

China Overseas Land & Investment Limited controlled by the nation’s construction ministry fell 2.3% to HK$14.14.

China Resources Land Limited, the state-controlled developer, fell 3.2% to HK$13.04.

CNOOC Limited fell 3.4% to HK$12.44 after the offshore oil explorer said Hong Kong shares traded sharply lower early Monday as mounting fears about the euro zone and a big drop Friday on Wall Street hit stocks across almost all sectors.

Evergrande Real Estate Group Limited fell 5.5% to HK$2.25 after the company says it will likely extend the 15% nationwide discount on its flats that was scheduled to end yesterday.

Tingyi (Cayman Islands) Holding Corp dropped 3.9% to HK$16.46 after the maker of packaged food reported first quarter sales rose 23% to $1.45 billion from $1.18 billion a year ago. Net profit in the quarter rose 10% to $102.2 million or 1.82 cents per share compared to net profit of $92.8 million or 1.66 cents per share a year ago.