China Stocks Flat; ICBC Rights Offering

Chandrasekhar Atreya
29 Jul, 2010
New York City

Stocks in China rallied led by cement and steelmakers after the central bank said it will keep a loose monetary policy. ICBC is planning a rights issue. China ranks first in emerging countries for investment. Industrial accidents are on the rise in China.

[R]5:00 PM Hong Kong, China – Stocks in China rallied led by cement and steelmakers after the central bank said it will keep a loose monetary policy. ICBC is planning a rights issue. China ranks first in emerging countries for investment. Industrial accidents are on the rise in China.[/R]

Stocks in Hong Kong traded marginally higher and in Shanghai were nearly unchanged.

The Hang Seng Index in Hong Kong added 0.01% or 2.64 to close at 21,093.82. The CSI 300 Index in China gained 0.5% or 14.25 to close at 2,877.98.

Industrial and Commercial Bank of China says it plans to raise $7.4 billion in right issue to replenish its capital. ICBC says will sell as many as 0.6 shares for every 10 or up to 15.06 billion shares in Shanghai and 4.98 billion shares in Hong Kong, according to a statement from the company made yesterday.

Agricultural Bank of China increased the size of its IPO to about $20.8 billion after selling more stocks in Hong Kong. Agbank sold a further 3.81 billion shares at the IPO price of HK$3.2 thus raising HK$12.2 billion, the company said in a statement today.

The IPO sale may overtake the record sale of Industrial & Commercial Bank of China Ltd’s $21.9 billion if the company exercises an option to expand the Shanghai offering also.

China is ranked No.1 among 27 emerging economies for investment opportunities backed by its huge consumer market, an increasingly open economy and the extremely rapid trade growth, an industry report said.

China was followed by India in second place and Russia third, according to the Emerging Markets Opportunity Index 2010 published by Grant Thornton China yesterday.

The index takes account of key factors such as economy size, wealth, involvement in world trade, growth potential and levels of human development. China scored 454 points of these factors in total, which more than doubled India''s 222 points.

""China leads the way thanks to the country''s huge consumer market, an increasingly open economy and the extremely rapid trade growth, which offer a myriad of business opportunities for potential investors,"" said Xia Zhidong, vice chairman of the consulting firm.

Shanghai’s fiscal revenue growth picked up in the first half of this year due to the city’s rapid economic recovery and a prosperous World Expo. The city’s fiscal revenue grew 23.3% from a year earlier to 156.4 billion yuan through June 30.

Revenue from online games in China will grow at 30% this year due to an increase in the number of domestically developed games, industry regulators said yesterday during a game forum in Shanghai.

China’s online game revenue will grow about 30% this year after reaching 25.6 billion yuan in 2009, said Sun Shoushan, Vice Director of the General Administration of Press and Publication.

Shanghai will strengthen its efforts to launch commercial pension funds that will help people plan for a retired life, the city’s regulator said yesterday. The trial program will encourage individuals to buy commercial pension products by allowing them to contribute by deductions from their taxable income.

The Shanghai Bureau of the China Insurance Regulatory Commission along with the help of finance and tax authorities are now finalizing the plan after years of research.

China is grappling with a spate of accidents that grow more by the day. Rescuers continued working in the city of Nanjing where a gas pipeline blast at an abandoned plant killed a dozen people yesterday and left another 15 seriously injured. This was followed by an industrial accident in the city of Jilin where 3,000 barrels filled with chemicals were washed into a local river causing severe pollution.

Shares of Aluminum Corp of China Ltd were suspended from trading today ahead of a ceremony in Beijing that will be attended by Rio Tinto group.

Chinalco and Rio will sign an agreement to develop a large iron-ore mine in Guinea, the Shanghai Securities News reported today. Chinalco will fund purchase of 44.65% stake in Simandou over the next two to three years, London-based Rio said on March 15.

Shanghai Movers

Baoshan Steel added 2.2% to 6.55 yuan, its highest listing since May 24 and Angang Steel Co rose 3.2% to 8.8 yuan.

Guangdong Electric Power Development Co jumped 6.7% to 6.88 yuan and Anhui Conch, China’s biggest cement maker gained 3.3% to 20.22 yuan.