China Region Stocks at 14-month Lows

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

Stocks in Shanghai and Hong Kong fell on global worries. Standard Chartered agrees to invest $500 million in Agbank IPO. Ping An Bank Co agrees to merge with Shenzhen Development Bank. Citic Securities seeks $1.26 billion for China Securities stake.

[R]5:00 PM Hong Kong, China – Stocks in Shanghai and Hong Kong fell on global worries. Standard Chartered agrees to invest $500 million in Agbank IPO. Ping An Bank Co agrees to merge with Shenzhen Development Bank. Citic Securities seeks $1.26 billion for China Securities stake. Daqin Railway wins approval for 16.5 billion yuan share offering.[/R]

Stocks in Shanghai and Hong Kong continued to slide and hovered near 14-month lows. Investors are grappling with the lowered expectation of economic growth and ongoing jitters with the liquidity concerns in the euro-zone. Falling consumer confidence in the U.S. also unnerved investors.

The CSI 300 Index fell 1.12% or 28.95 to close at 2,563.07. The Hang Seng Index fell 0.59% or 119.91 to close at 20,128.99.

The People’s Bank of China in its controlled float of yuan, fixed the reference rate as 6.7909 a dollar today, its sixth continuous day of higher reference rate than the previous day’s closing rate.

Standard Chartered Plc is planning to invest $500 million in Agricultural Bank of China’s Hong Kong IPO, the bank said in its statement today.

The two banks recently inked an agreement to develop new business opportunities together. Peter Sands, Group CEO of Standard Chartered, commented, “This investment is the natural next step in our long-standing understanding as it underpins our recent agreement to develop business together.”

Ping An Insurance Group Co, in an effort to get around a China rule barring insurers from controlling more than one lender, is planning to merge its banking unit with Shenzhen Development Bank Co.

Ping An Bank Co, the banking unit of the insurer and Shenzhen Development Bank, both based in Shenzhen, are working on a restructuring program, according to statements issued by the companies late yesterday. Trading in the shares of both companies were suspended today.

Shanghai Movers

CITIC Securities Company Limited fell 2.5% to 11.70 yuan after the brokerage firm offered to sell its 53% stake in China Securities Co. for 8.59 billion yuan ($1.26 billion) on the Beijing Financial Assets Exchange.

Daqin Railway Co., Ltd added 2.1% to 8.17 yuan after the company won approval from the China Securities Regulatory Commission on June 28 for its plan to offer two billion shares, reports China Securities Journal, citing an announcement by the CSRC.

DaTong Coal Industry Co., Ltd fell 3.8% to 27.98 yuan after a report by the Beijing Business Today newspaper that it paid higher than market prices to buy a mine from its parent company.

Sany Heavy Industry Co., Ltd advanced 2.0% to 18.27 yuan after the company said its parent will increase its holding of the listed unit in the next six months if prices don’t exceed 20 yuan apiece, according to Bloomberg report.

Shanghai Aerospace Automobile Electromechanical Co., Ltd fell 4.5% to 8.94 yuan after the company said it plans to raise as much as 1.39 billion yuan in a rights offer.

Xinyu Iron & Steel Co., Ltd, the steelmaker, fell 0.9% to 5.06 yuan.

HK Movers

China Mobile Limited rose 0.3% to HK$77.95 after the phone carrier was the only bidder identified of three that took part in the Mobile TV spectrum auction, according to a statement by the Office of the Telecommunications Authority.

China Singyes Solar Technologies Holdings Limited dropped 2.5% to HK$3.50 after the producer of solar energy products said it agreed to buy a site in Xiangtun, Hunan province for 32 million yuan to expand production capacity.

Lee & Man Paper Manufacturing Ltd fell 1.8% to HK$5.80 after the company’s stock was downgraded to “neutral” from “outperform” at Credit Suisse Group AG.

PetroChina Company Limited rose 0.1% to HK$8.75 after the parent company signed an agreement with Nippon Oil Corporation on June 29 to set up a joint venture to operate an oil refinery in Osaka, Japan, reports 21st Century Business Herald.

United Company RUSAL Plc, the aluminum producer, fell 4.8% to HK$7.04.