Stocks Rally in Shanghai; China-Russia Pipeline

Chandrasekhar Atreya
27 Sep, 2010
New York City

Stocks in Shanghai and Hong Kong rally following a surge in international markets. Profits at companies climb 55% in the first eight months of the year. The $25 billion oil-for-loan program is expected start the flow of oil today from Russia to China.

[R]5:00 PM Hong Kong, China – Stocks in Shanghai and Hong Kong rally following a surge in international markets. Profits at companies climb 55% in the first eight months of the year. The $25 billion oil-for-loan program is expected start the flow of oil today from Russia to China.[/R]

The first oil pipeline between Russia and China is expected to open today. The $25 billion loan for oil program will enable Russia to provide 300,000 barrels of oil a day for the next two decades to China as Russia completed its 2,100 km pipeline. Russia will become the third largest energy provider to China after Saudi Arabia and Angola.

The pipeline stretches from Skovorodino in Siberia to Daqing in north-east China.

Stocks in mainland China rallied after a three-day holiday boosted by strong gains in global markets and near record prices in gold supported stocks. The stocks in Hong Kong closed at their highest level in more than eight months with growing investor appetite for Asian equities and a strong performance by local property developers.

The Hang Seng Index in Hong Kong added 1% or 221.41 to close at 22,340.84. The CSI 300 Index in China also gained 1.66% or 47.55 to close at 2,905.03.

Profits of industrial companies of China climbed 55% in the first eight months of 2010 from a year earlier, according to data from the Statistics Bureau.

Net income surged 55% to 2.6 trillion yuan compared to a drop of 11% in the same period in 2009, the Statistics Bureau said Monday.

China said it will bar companies from buying additional plots if they have held land for more than a year without developing it, the government said.

The government will also increase land available for smaller, affordable apartments in cities with high prices, according to a statement on the Ministry of Land & Resources’ Web site on Monday.

China allowed banks to sell loans on its interbank market for the first time on Friday. Twenty one banks including the Industrial and Commercial Bank of China, the Agricultural Bank of China, HSBC Holdings, and Deutsche Bank, signed agreements in Shanghai Friday to join the loan transfer plan.

“The global financial crisis that began in 2008 showed the inefficiency of the existing financial regulatory system in guaranteeing financial stability,” said People’s Bank of China Governor Zhou Xiaochuhan, adding that the start of loan transfer plan will help the central bank’s macro control, optimize lender’s credit structure and reduce risks.

A U.S. congressional panel turned up the pressure on China over the yuan on Friday, approving a bill that would let the United States slap punishing duties on imports from china.

In a move likely to increase trade tensions with China, the House of Representatives of Ways and Means Committee backed the legislation on a voice vote and cleared the way for the full house to take it up next week.

Gazporm of Russia signed a deal extending the terms of Russian gas supply to China on Monday but the two sides have still not struck a deal on price.

The document was signed by Gazprom President Alexei Miller and President of the Chinese National Petroleum Corp Jiang Zemin during bilateral talks in Beijing as part of Russian President Dmitry Medvedev’s three-day visit to China.

OAO Rosneft, Russia’s largest oil producer, and China National Petroleum Corp have agreed to build a $5 billion refinery in China, even when talks on natural gas supplies are still going on.

A feasibility study for the refinery to be built in Tianjin will be ready in the next six months, and construction will take two years, Russian Deputy Prime Minister Igor Sechin said Wednesday, according to a statement posted on the government’s Web site.

Cheung Kong (Holdings) will offer the first 108 apartments in its Oceanaire residential development in Hong Kong at less-than-expected average price of HK$6,438 per square foot, the South China Morning Post said, citing real estate agents.

Democratic leaders in the U.S. began a final pre election push for legislation that would authorize trade sanctions against China if that country’s currency is kept undervalued artificially.

“It is time for Congress to pass legislation that will give the administration leverage in its bilateral and multilateral negotiations with the Chinese government, so that U.S. businesses and workers have a level playing field in world trade,” House Speaker Nancy Pelosi said Wednesday in a statement.

Chinese Premier Wen Jiabao said in New York Wednesday a 20% rise in the yuan would cause severe job losses and trigger social instability. Premier Jiabao added that he cannot imagine how many Chinese factories will go bankrupt and how many workers will lose their jobs, should China agree to demands for a 20% to 40% gain in the yuan.

Taiwan’s banking regulators on Saturday approved the applications of two major mainland banks, Bank of China and Bank of Communications, to establish representative offices on the island.

The two banks will not conduct banking operations and will engage only in non-profit seeking activities like making contacts with local bankers and collecting financial information about the island, Taiwan’s banking regulator said.

China Suntien Green Energy is all set to raise up to $369 million in an initial public offering, according to the term sheet, reports Reuters on Monday.

China defended its regulation of rare-earth minerals industry as it protects the environment, as rare earth minerals have become increasingly important in the manufacturing of new energy products like electric-car batteries, wind turbines and other products.

China will levy anti-dumping duties of between 50.3% and 105.4% on imports of chicken from the United States from today, the Ministry of Commerce said Sunday.

The U.S chicken industry has dumped broiler products into the Chinese market and caused substantial damage to the domestic industry, the Ministry said in an online statement, citing the results of an investigation initiated a year ago.