China Agriculture IPO; More Strikes in China

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
23 Jun, 2010
New York City

China stocks declined led by energy and material stocks while stocks in Hong Kong gained marginally. China will cancel export tax rebates in more than 400 items from July 15. Bank of Communications stocks rise after 17 billion yuan rights issue.

[R]5:00 PM Hong Kong, China – China stocks declined led by energy and material stocks while stocks in Hong Kong gained marginally. China will cancel export tax rebates in more than 400 items from July 15. Bank of Communications stocks rise after 17 billion yuan rights issue.[/R]

Stocks in China dropped after energy and material stocks declined the most in the CSI 300 Index. The index lost 0.91% or 25.22 to close at 2,758.50 today. Stocks in Hong Kong reversed yesterday’s decline and gained 0.18% or 37.53 to close at 20,856.61 today.

Hang Seng Property Index was the only decliner among the four industry groups tracked by the broader Hang Seng Index, with a drop of 0.5%.

The People’s Bank of China set the yuan trading rate as 6.8102 per dollar, ahead of yesterday’s close of 6.8136. However the yuan closed today at 6.8124.

China will cancel export tax rebates for 406 products with effect from July 15 according to a joint announcement by the Ministry of Finance and the State Administration of Taxation today. These items which include steel, non-ferrous metals and building materials were previously eligible for 5% to 17% tax rebates, according to the report.

Initial Public Offerings in developing nations raised as much as $29.3 billion this quarter, at almost three times the amount raised in industrialized nations, after the cascading euro-zone debt crises sent almost all stock indexes in these countries to their lowest levels in 2010.

China Agricultural Bank is going ahead with a July IPO of as much as $28 billion, while Petrobras, Brazil’s oil company plans to raise as much as $25 billion in September.

Both Toyota Motor Corp and Honda Motor Co suspended production at their factories in southern China after two of their parts factories were affected by walkouts. With this the number of such walkouts in this part of China now stands at about eight in the past month.

Honda shut down one of its two plants in Guangzhou after a walkout in NHK Spring Co, said Natsuno Asanuma, a Tokyo-based spokeswoman at Honda. Toyota also closed its factory at Guangdong province after a strike at Denso Corp affected supply to this plant, said Hitoshi Yokoyama, a Beijing-based spokesman for the company.

Shanghai Movers

Anhui Conch Cement Company Limited dropped 1.5% to 17.71 yuan after the cement maker had its Hong Kong-traded stocks rating downgraded to “hold” from “buy” at BNP Paribas.

Baoshan Iron & Steel Co., Ltd, the steelmaker, fell 2.7% to 6.08 yuan.

Bank of Communications Co., Ltd rose 1.3% to 6.21 yuan after the lender said it had completed its 17.13 billion-yuan rights issue in A shares, and investors had bought 97.84% of the A shares on offer in the issue, according to the statement.

Haitong Securities Company Limited the brokerage fell 0.6% to 10.56 yuan.

Hebei Iron and Steel Co., Ltd dropped 1.7% to 3.97 yuan after the company won approval from the Hebei State-owned assets supervision and administration commission for its plan to conduct a private placement, reports China Business News, citing a company filing.

[HK Movers

Henderson Land Development Co., Ltd rose 0.9% to HK$48.25.

Hong Kong Exchanges and Clearing Limited fell 0.7% to HK$125.50 after the operator of Asia’s stock market will collaborate with Brazil''s stock exchange at the end of 2010 to link the two bourses for cross-border listing, according to a media report quoting Chairman Ronald Arculli.

PCCW Limited advanced 2.7% to HK$2.27 after the company’s stocks were upgraded to “overweight” from “equal-weight” at Morgan Stanley.