China Stocks 3-month High; CSD Orders 14 Ships

Chandrasekhar Atreya
19 Aug, 2010
New York City

Stocks in China rallied to a three month high led by resource companies. Revenues and profits of state-owned enterprises soar in the first seven months of the year. China allows yaun-ringgit trading as it broadens the yuan presence in Asia.

[R]5:00 PM Hong Kong, China – Stocks in China rallied to a three month high led by resource companies. Revenues and profits of state-owned enterprises soar in the first seven months of the year. China allows yuan-ringgit trading as it broadens the yuan presence in Asia.][/R]

China stocks rose to a three month high led by gold and coal producers. Stocks in Hong Kong rose on earnings optimism after 12 of the 18 Hang Seng index members reported better-than-expected earnings in the first half.

The Hang Seng Index in Hong Kong gained 0.24% or 49.73 to close at 21,072.46. The CSI 300 Index in China added 0.61% or 18.03 to close at 2,955.40.

The Chinese government is considering a new plan that will invest 5 trillion yuan in new energy industries, the China Securities Journal reports.

Revenues of the nation’s state-owned enterprises grew by 38.8% in the first seven months of the year from the same period last year, the Ministry of Finance said Wednesday. Business revenue stood at 16.87 trillion yuan in the first seven months, according to the statement on the ministry’s Web site.

The revenues in July were however 7.8% lower than in June of 2010. The profits of state-owned enterprises soared 50.1% to 1.1 trillion yuan in the year.

China Shipping Development Co said it plans to order 14 dry bulk ships for 2.88 billion yuan to boost its shipping capacity after its first half profit increased due to a rebound in rates.

Shenhua China Shipping Co, a unit of CSD will pay 2.4 billion yuan for 12 bulk carriers of 462,000 ton capacity each, the company said in a statement to the Shanghai Stock Exchange. Another unit of CSD, Jiahe Shipping will invest 480 million yuan for the other two bulk carriers of 530,000 ton capacity each.

E-Commercial China, the nation’s first major commercial property services provider, was set up yesterday in Shanghai to tap the country’s rapidly growing commercial real estate market, which is now dominated by international players.

China’s banking regulator recently asked stress tests to be undertaken by lenders for worst case scenario of 50% fall in house prices. The Bank of Communications said Wednesday it can bear the 50% drop in home prices quoting the result of the stress tests done earlier.

The Shanghai-based bank’s retail bad loan ratio will increase by 1.2 percentage points if housing prices tumble by 50%, said Qian Wenhui, the bank’s Executive Vice President.

China has ordered the expansion of vegetable production, with increased funding and rail links in a move to stem the persistent food shortage in smaller metro regions.

The State Council, China’s Cabinet, at a meeting Wednesday agreed to take measures covering the entire process of vegetable plating, storage, transport, distribution, marketing, quality monitoring and consumption.

A national alliance, organized by the State-Owned Assets Supervision and Administration Commission was formed in Beijing Wednesday to jointly develop electric vehicles in China as it drives towards a greener future.

The alliance with three major players FAW Group Corp, Dongfeng Motor Corp and Changan Automobile Group Co will be supported by 13 other companie in the fields covering oil, aerospace, information technology and electricity sectors to help develop core technologies and support infrastructure construction.

General Motors Co and SAIC Motor Corp Ltd announced Wednesday joint development of new technologies to raise fuel efficiency. The two companies will jointly design and produce a family of new small-displacement gasoline engines and an advanced transmission.

Beijing Automotive Industry Holdings Co Wednesday signed a deal in Guangzhou to acquire the financially ailing smaller car maker Baolong Auto.

China for the first time allowed the yuan to trade against the Malaysian ringgit on the domestic market Thursday, in its latest move to turn the yaun into a major global currency and boost cross border trade using the Chinese currency.

Beijing has been promoting the use of yuan to settle commercial trade transactions and expanding the scope of yuan business in Hong Kong in recent years to internationalize the currency. Earlier this week, it launched a trial program that allows overseas investors to put yuan held offshore into China’s interbank bond market.

China’s largest steelmaker by output, Hebei Iron and Steel said it is in talks with Australia’s Sundance for potential cooperation on the Mbalam project in West Africa.