China Region Stocks Drop; Zijin VP Detained

Chandrasekhar Atreya
30 Jul, 2010
New York City

Stocks in China retreated led by financials and steelmakers. China clears the takeover of Volvo Car Corp by Geely Holding. Charles River withdraws takeover offer of WuXi on the investors

[R]5:00 PM Hong Kong, China – Stocks in China retreated led by financials and steelmakers. China clears the takeover of Volvo Car Corp by Geely Holding. Charles River withdraws takeover offer of WuXi on the investors’ resistance. Flood washes 3,000 chemical barrels into Songhua river.][/R]

Stocks in China fluctuated and retreated, paring the benchmark index’s biggest monthly advance in a year. The Shanghai market index lost more than 1% in the morning session led by financial shares and steel makers. Stocks in Hong Kong retreated on mainland sentiments.

The Hang Seng Index in Hong Kong fell 0.3% or 64.01 to close at 21,029.81. The CSI 300 Index in China fell 0.32% or 9.13 to close at 2,868.85.

Zijin Group’s Vice President has been detained by the police of Fujian province after a toxic spill at one of its copper smelter killed several thousand tons of fish in the Ting River. Zijin confirmed yesterday that its Vice President Chen Jiahong has been under detention since Tuesday.

The company said it will provide further details after investigations are completed. The head of Shanghang County has been suspended. A vice head of the county has been asked to resign and the head of the local environment protection authority was sacked.

Zhejiang Geely Holding Group’s purchase of Volvo Car Corp is approved by the Chinese government, clearing the way for completion of the deal that was clinched in March.

The official approval of the deal was given by the Ministry of Commerce on Monday, a spokeswoman named Gao for the ministry told Shanghai Daily yesterday. The National Development and Reform Commission also approved Geely’s $1.8 billion acquisition of the Swedish car maker from Ford Motor Co, Geely spokesman Ning Shuyong confirmed yesterday.

Shanghai Airlines agreed to terminate its deal with Star Alliance as a result of its recent acquisition by China Eastern Airlines, which is expected to join the rival SkyTeam Alliance.

Chinese soldiers and emergency workers retrieved almost 1,500 barrels out of the 7,000 chemical barrels that were washed into a river in the north east of the country by flood waters around 7:30 p.m. local time yesterday, the official Xinhua News Agency reported today.

China should ask its national pension fund to demand more corporate disclosure about the effect of the various accidents on the environment, a group said.

Better coordination between the stock exchanges in China and the China Securities Regulatory Commission is needed to ensure compliance by companies, according to the Association for Sustainable & Responsible Investment in Asia.

Charles River Laboratories International Inc withdrew its $1.6 billion offer for takeover of WiXi PharmaTech (Cayman) Inc, because of investor resistance. Charles River will pay WuXi a $30 million break fee after mutually agreeing to end the takeover offer made in April, the Wilmington, Massachusetts-based company said today.

Google Inc reported today that access to its Web site in China is working normally after earlier media reports suggested services, including search, mobile and advertising were completely blocked.

Shanghai’s retail sales increased by 19.5% from a year earlier in June, after a rise of 18.9% a month earlier, according to a panel report of the Shanghai People’s Congress yesterday.

The World Expo has driven the fast pace in retail sales growth, said Zhou Bo, Director of the Shanghai Development and Reform Commission.

Shanghai Movers

China CAMC Engineering Co gained 3.9% to 38.60 yuan after the regulator approved the company’s private placement plan.

Sinochem International Corp added 1.9% to 13.44 yuan after reporting a 77% increase in first half profits.

Xishan Coal & Electricity Power Co slid 3.4% to 21.45 yuan and Yanzhou Coal lost 3% to 17.84 yuan.

North East Securities retreated 1.2% after reporting a fall of 77% in its first half profit.