Weekly Gains in HK, Shanghai

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

Stocks in China rally to post big weekly gains. China business climate in the second quarter improves. CITIC Securities climbs after release of June net income. Cosco Shipping predicts net profit to rise 54.4% in first-half.

[R]5:00 PM Hong Kong, China – Stocks in China rally to post big weekly gains. China business climate in the second quarter improves. CITIC Securities climbs after release of June net income. Cosco Shipping predicts net profit to rise 54.4% in first-half.[/R]

Stocks in China rallied and rose for the second day, leading the benchmark index to its biggest weekly gain this year after a government report showed improving business climate.

Stocks in Hong Kong also rose leading the benchmark index for its biggest weekly gain in three months of 2.4%, after the U.S. reported a drop in its jobless claims.

Hang Seng Index in Hong Kong increased 328.10 or 1.64% to 20,378.66 and CSI 300 index in China higher 71.18 or 2.76% to 2,647.10.

China’s National Bureau of Statistics said the nation’s business climate index increased in the second quarter to 135.9 from 132.9 in the previous quarter. A reading above 100 indicates economic expansion.

Taiwan’s insurance regulator may amend rules allowing local insurers to invest in Chinese securities before the end of September after the two sides signed an agreement on June 29 to cut tariffs and ease access to services including banking, securities and insurance.

“The plan needs to be approved first by the cabinet, Wu Chung-Chuan, secretary general of the insurance bureau at the Financial Supervisory Commission, said in a telephone interview today from Taipei.

China is planning to double the world’s capacity for making solar panels by giving a loan of 36 billion yuan to Yingli Green Energy Holding Co, according to New Energy Finance.

“The loans are enough to increase the world’s solar wafer and cell capacity by 100%. It will allow the Chinese companies to deliver unprecedented economies of scale,” said Jenny Chase, head of solar-energy analysis for New Energy Finance in London.

China, the world’s largest metal consumer, held a meeting in Beijing to discuss details of adjustment of resource compensation fee for as many as 21 commodities including coal, copper, gold, oil and natural gas.

The discussions were about the changes that need to be made to the 1994 compensation regulation, the China Iron and Steel Association said on its Web site, citing a statement from the Ministry of Land and Resources. It also said, representatives from 11 provinces including Hubei, Tianjin, Henan, and Inner Mongolia, attended the meeting.

Li & Fung Ltd said it has paid $140 million to acquire one health-and-beauty company and a fashion company besides entering into four licensing deals in a statement today to shore up its earnings.

Apart from acquiring Jackel Group, which has packaging, fragrance and personal care business, Li & Fung also bought HTP Group a jeans wear company, and Cipriani Associates Inc, a designer, distributor and importer of accessories in the U.S., Canada and Mexico.

Some workers of Honda Motor Co’s assembly plant in Guangzhou, China, walked out on July 7 and July 8, causing disruption in the plant for the fourth time or more since May of this year.

Some of the workers at Honda’s joint venture plant in the city had staged the walk out stating that they were dissatisfied with the working conditions, said Yoshiyuki Kuroda, a company spokesman from Tokyo today. They later returned to work after reaching an agreement with the management, he said.

French Car maker PSA Peugeot Citroen signed a deal to set up a 50-50 joint venture with China Changan Automotive Group in a move to ramp up capacity in the world’s largest auto market.

The venture would have an initial investment of 8.4 billion yuan, PSA said in a statement.

Shanghai Movers

China Construction Bank Corporation added 1.9% to 4.80 yuan after the bank said it requires a 55% down payment and an interest rate that is 20% higher than the benchmark interest rate.

China Eastern Airlines Corporation Limited advanced 5.6% to 6.77 yuan after the airline said its passenger numbers in June rose 70% from a year ago, China Business News reported.

CITIC Securities Company Limited rose 2.3% to 11.85 yuan after the brokerage had 673.25 million yuan ($99.3 million) of net income in June, according to a statement to Shanghai’s stock exchange, which didn’t give comparative figures.

China Everbright Securities Co., Ltd rose 2.1% to 15.46 yuan after the state-owned investment group said it had 214.5 million yuan ($31.7 million) of profit in June.

COSCO Shipping Co., Ltd rose 0.8% to 7.12 yuan after the company predicts first half operating revenue to go up 1.38% year-on-year to 2.029 billion yuan, according to a company filing.

Haitong Securities Company Limited rose 2.4% to 9.27 yuan after the brokerage firm said on Friday that first-half net profit fell nearly one-third from a year ago due to weak stock markets, according to a Reuters report.

Shanghai International Airport Co., Ltd rose 3.2% to 11.95 yuan after the company was upgraded to “buy” in new coverage by Goldman Sachs Group Inc.

HK Movers

Henderson Land Development Co., Ltd rose 2.6% to HK$47.25 after the company executives refused to appear before a Legislative Council committee next week to answer questions about its luxury development on 39 Conduit Road.

Li & Fung Limited increased 7.5% to HK$37.85 after the anouncement of the signing of 7 deals during the past few months, including 3 acquisitions related to the health, beauty and cosmetics sector, jeanswear and US onshore businesses, and 4 licensing deals.