China Stocks Rally; Agbank to Price IPO

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
06 Jul, 2010
New York City

Stocks in China region rallied boosting other exchanges in Asia. Chalco plans to seek bank loans as market drop delays share sale. Taiwan and China may set up omnibus clearance mechanism. China Vanke sees 27.9% rise in property sales in June. Yutong Bus sales rises 49% in first-half.

[R]5:00 PM Hong Kong, China – Stocks in China region rallied boosting other exchanges in Asia. Chalco plans to seek bank loans as market drop delays share sale. Taiwan and China may set up omnibus clearance mechanism. China Vanke sees 27.9% rise in property sales in June. Yutong Bus sales rises 49% in first-half.[/R]

Rally in China stocks sparked a rise in other markets across Asia. Stocks in Hong Kong also rallied, reversing declines, led by developers and after Central Huijin Investment Ltd agreed to participate in Bank of China Ltd rights offering.

The Hang Seng Index fluctuated and then rallied 1.22%r 241.92 points to close above the 20,000 mark at 20,084.12. Among the four industry groups tracked by the index, property index gained the most. The CSI 300 Index that tracks yuan-dominated stocks known as ‘A’ shares, in Shenzhen and Shanghai advanced 2% or 50.25 to close at 2,562.90.

Agricultural Bank of China Ltd, the nation’s biggest lender by customers, expects to set a final IPO price tomorrow.

Aluminum Corp of China Ltd, China’s largest maker of the metal, that had won approval from the China Securities Regulatory Commission to sell as many as 1 billion shares, has pushed this planned sale by one year from August 23, the Beijing-based company said today in a statement to the Shanghai Stock Exchange today.

The company will seek bank loans instead after an equity market decline had forced it to delay share sale plans.

“The current market conditions are not at all favorable for the sale of shares and so the company will seek bank loans,” said Shen Hui, a company spokeswoman from Beijing today.

Money market rate in China increased today after a report showed that as much as 500 billion yuan could be locked up during the subscription period of the scheduled IPO sale by Agricultural Bank of China Ltd.

The bank started offering shares online to both individual and institutional investors today as it plans to raise as much as $20.1 billion by selling stocks in Shanghai and Hong Kong.

Shenhua Group Corp, China’s biggest coal producer, expects its profits to increase and cross 100 billion yuan mark by the year 2013, as the company develops projects in Australia, Indonesia, Mongolia and Russia.

The company is targeting revenue of 300 billion yuan by 2013, with profits around 100 billion or more according to notes prepared by the company’s General Manager of coal transport and sales for the scheduled coal conference in Dalian city tomorrow.

Shanghai Movers

Aluminum Corporation of China Limited added 1.7% to 8.74 yuan after the maker of the metal plans to seek bank loans after an equity market decline forced it to delay share sale plans.

Bank of China Limited advanced 3.2% to 3.48 yuan after signing of the cross-Taiwan Strait Economic Cooperation Framework Agreement with the Central Bank of China in Taiwan is considering to sign an omnibus cross-Strait clearance mechanism, which will cover the clearances for currency, trade settlement, and deposits, according to Chinese-language Economic Daily News sister publication of Taiwan Economic News.

CITIC Securities Company Limited rose 1.4% to 11.59 yuan after the broker announced Tuesday that its board of directors approved the plan to inject 2.2 billion yuan of into Gold Stone Investment Co., a wholly-owned private equity subsidiary of the securities company.

China Vanke Co., Ltd rose 1.1% to 7.06 yuan after the residential properties developer, announced yesterday that its property sales grew 27.9% year on year to 8.77 billion yuan in June.

Chongqing Brewery Co. Ltd rose 2.8% to 33.77 yuan.

Dongfeng Automobile Co Ltd rose 1.5% to 4.49 yuan after the company said its shareholders approved plans for its parent to sell a 12.25% stake to Carlsberg A/S.

Gemdale Corporation rose 0.4% to 6.36 yuan after the company said its President Zhang Huagang resigned for personal reasons, and will be replaced by Vice President Huang Juncan.

Zhengzhou Yutong Bus Co Ltd rose 2.4% to 15.52 yuan after the company recorded a 44.1% year-on-year increase in the production volume of buses in the first half of 2010 to 16,476 units, according to a company filing.

HK Movers

Glorious Property Holdings Limited rose 1.8% to HK$2.24 after the company said it is cautious about the outlook for sales later this year on tighter lending conditions.

Poly (Hong Kong) Investments Limited gained 4.6% to HK$8.10 after the company reported its sales performance for the first half of 2010, with contracted sales revenue amounting to approximately.7 billion yuan, representing 24% increase form a year ago.

Yuzhou Properties Company Limited fell 0.7% to HK$2.51 after the company announces that the Group has signed the agreement with Quanzhou local government for primary and secondary developments of the largest urban complex project in West Strait Economic Zone.