Shanghai 5-day Rally Halts; Sinovel Wind IPO to Raise $9.5 Billion

Chandrasekhar Atreya
05 Jan, 2011
New York City

Shanghai benchmark index dropped after five-day rally as commodities weakened. Sinovel Wind Group, China

[R]5:00 PM Hong Kong, China – Shanghai benchmark index dropped after five-day rally as commodities weakened. Sinovel Wind Group, China’s largest wind turbine maker plans to raise $9.46 billion in an initial public offering. Sino-Russia oil pipeline starts operating.[/R]

Shanghai’s key stock index dropped for the first time in five trading days after gold miners and metal producers led the fall following overnight slump in commodity prices.

The Shanghai Composite Index dropped 0.49% or 14.05 to 2,838.59 and the CSI 300 Index lost 0.44% or 14.02 to close at 3,175.66.

The Hang Seng Index in Hong Kong added 0.38% or 89.34 to 23,757.82.

Initial public offerings on the mainland are expected to recede this year from a record in 2010, an industry survey said on Tuesday.

The funds raised through IPOs will drop to 400 billion yuan in Shanghai and Shenzhen this year, down from 478.3 billion yuan in 2010, said PricewaterhouseCoopers in a report on Tuesday.

An oil pipeline linking Russia’s far-east and northeast China started operating on Monday and will transport 15 million tons of crude oil annually from Russia to China by 2030.

Sinovel Wind Group Co, China’s largest wind turbine maker, plans to raise as much as 9.46 billion yuan in an initial public offering in Shanghai, nearly three times its original target.

The company, which built the turbines for Shanghai’s Donghai Bridge Wind farm, plans to sell 105.1 million shares at 80 yuan to 90 yuan per share, according to the price range released yesterday by the company. Sinovel originally sought 3.45 billion yuan in the sale.

The shareholders of China’s Laiwu Steel rejected a plan to merge with Jinan Iron and Steel, a joint statement issued by the two companies said yesterday.

The merger, estimated to be worth about 11.3 billion yuan, required the consent of two-thirds of the members of both companies, but while Jinan Steel approved the proposal, Laiwu did not, the statement said.

Bank card-based transactions rose to 92.2 billion yuan during the three-day New Year holiday on the Chinese mainland, up 44.5% from a year ago period.

Meanwhile overseas bank card-based transactions also rose 47% in the same period, said China’s UnionPay Co, the nation’s sole bank card transaction switcher.

China Vanke Co said Tuesday its sales in 2010 topped 108.2 billion yuan spread over a total of 8.98 million square meters, according to a regulatory filing by the company with the Shenzhen Stock Exchange.

In December, the company’s sales rose 51.3% to 8.35 billion yuan while floor area sold soared 69.8% to 689,000 square meters.

China Eastern Airlines expects its 2010 profit to soar ten-fold from 2009 on rising passenger traffic, the World Expo and the takeover of Shanghai Airlines, the carrier said Tuesday.

The airline’s profit in 2009 was 540 million yuan, the company said in a preliminary statement to the Shanghai Stock Exchange on Tuesday.

The yuan rose Tuesday for the tenth day in a row on its central parity rate on talk that a faster rise of the currency is needed to tame inflation.

The People’s Bank of China set the central parity rate of the yuan at 6.6215 against the greenback on Tuesday, up 0.2% than the last trading day in 2010. The yuan ended Tuesday at 6.6088 to a dollar.

Shanghai overtook Singapore as the world’s largest container port for the first time in 2010, handling 29.05 million TEUs, city officials said Tuesday.

The city handled about 500,000 TEUs more than Singapore in the year 2010.

Stock Movers

Jiangxi Copper Co fell 2.39% to 44.85 yaun and Shandong Gold Mining Co shed 4.31% to 50.70 yuan. PetroChina Co dipped 1.2% to 11.25 yuan.

Banks were mixed on earning worries after media reported that the central bank will examine lending and capital levels each month to determine reserve requirements for individual bankers.

Bank of China lost 0.9% to 3.23 yuan and Agricultural Bank of China dropped 1.1% to 2.64 yuan.

Railroads and infrastructure developers gained after the railway bureau said the China would add around 5,000 kilometers of high-speed rail tracks. China CNR Corp, a major carriage builder, surged 4.4% to 8.14 yuan and China Construction Corp rose 1.7% to 7.01 yuan.

Shanghai Pudong Development Bank rose 1.4% to 12.78 yuan after the bank said that it expected profits in 2010 to surge 45.7% to 19 billion yuan.