China Region Stocks Rally; Motorola Sues Huawei

Chandrasekhar Atreya
22 Jul, 2010
New York City

Stocks in China rallied for the fourth day. Baidu estimated third quarter revenue to surge 77%. Motorola sues rival Huawei for stealing trade secrets. Dalian oil spill extends leading to closing of beaches on Yellow Sea. Corning plans to invest $800 million in a factory in Beijing.

[R]5:00 PM Hong Kong, China – Stocks in China rallied for the fourth day. Baidu estimated third quarter revenue to surge 77%. Motorola sues rival Huawei for stealing trade secrets. Dalian oil spill extends leading to closing of beaches on Yellow Sea. Corning plans to invest $800 million in a factory in Beijing.[/R]

Stocks in China fluctuated and gained for the fourth day in a row, posting the longest stretch of gains in the index since February. Stocks in Hong Kong also traded higher echoing mainland sentiments.

Hang Seng Index in Hong Kong rose steadily through the day to gain 0.5% or 102.47 to close at 20,589.70. The CSI 300 Index in China gained 1.24% or 33.95 to close at 2,781.29.

Baidu Inc, China’s most popular online search engine operator, expects third quarter revenue to rise at better-than-estimated rate after its main rival Google Inc lost market share.

“We have been gaining traffic share gradually. Profit for the second quarter to June 30, rose to 837.4 million yuan from 383.3 million a year earlier, and we expect third quarter revenue to rise 77% to 2.26 billion yuan,” said Baidu CEO Robin Li in a conference call today.

China’s auto sales, which have increased every month since February 2009, have begun to grow at a slower pace since April amid rising prices for consumer goods. Dealers have resorted to offering discounts to cover the sales tax and other costs to sustain the sales.

The average prices of locally made cars in China fell by 2.08% in June from a year earlier, according to data compiled by National Development and Reform Commission.

Shanghai-based Shui On Land Ltd, the developer controlled by Hong Kong billionaire Vincent Lo, is planning to sell some of the group’s retail and office assets outside Shanghai to improve cash flow.

The company is in talks with various parties about the sale even though no agreement has been reached, said Managing Director Freddy Lee in an Hong Kong interview.

Schaumburg, Illinois-based Motorola Inc sued its rival Huawei Technologies Co for allegedly conspiring with former employees of the company to steal trade secrets.

Huawei began receiving the information as early as 2001, Motorola, the maker of mobile phones and two-way radios, claimed in an amended lawsuit filed in the federal court of Chicago on July 16. The company had originally sued five former employees in 2008 for allegedly taking trade secrets to join Lemko Corp, which has a reseller agreement with Huawei.

China’s largest reported oil spill has doubled in size leading to emptying of beaches along the Yellow Sea. In the five days since a pipeline exploded at the northeastern port of Dalian, the oil has spread over 165 square miles of water, posing a severe threat to sea life and water quality. Clean up efforts included straw mats and frazzled workers with little more than rubber gloves. One worker has drowned, his body coated in crude.

Corning Inc, the world’s largest maker of LCD glass for televisions and computers, said Wednesday it will invest $800 million to build a factory in Beijing to make liquid crystal display glass. It plans to start in September and start production in first half of 2012.

Shanghai Active Stock Movers

Your-Mart Co gained 6.8% to 22.36 yuan.

Wanxiang Qianchao Co climbed 5.4% to close at 11.59 yuan.

CSG Holding Co rose 3.1% to 11.85 yuan and Xiamen Tungsten Co gained 3.1% to 20.34 yuan.