Shanghai Gains; Record M&A Deals in China

Chandrasekhar Atreya
18 Jan, 2011
New York City

Shanghai stocks stayed little changed after dipping to a 15-week low on Monday. M&A activities surge 27% to more than $200 billion and FDI soars 17.4% to $105.74 billion in 2010. Profits at state-run enterprises soars 37.9% to 1.99 trillion yuan.

[R]5:00 PM Hong Kong, China – Shanghai stocks stayed little changed after dipping to a 15-week low on Monday. M&A activities surge 27% to more than $200 billion and FDI soars 17.4% to $105.74 billion in 2010. Profits at state-run enterprises soars 37.9% to 1.99 trillion yuan.[/R]

Shanghai stocks, after dipping to a 15-week low on Monday, gained marginally on tightening concerns. Stocks in Hong Kong followed mainland markets lower.

The Shanghai Composite Index gained as little as 0.09% or 2.51 to 2,709.17 while CSI 300 Index rose 0.13% or 4.00 to 2,978.35.

The Hang Seng Index in Hong Kong lost 0.01% or 2.99 to close at 24,153.98.

China’s rapid growth and its push to consolidate its industries have propelled merger and acquisition deals in the nation to record levels in 2010, a report showed on Monday.

The number of deals increased 16% from a year earlier in 2010 to a record 4,251 and deal values soared 27% to more than $200 billion, a PricewaterhouseCoopers report showed. Overseas deals surged more than 30% to a record 188 transactions worth a combined $38 billion, the report showed.

China’s trade deficit in integrated circuitry topped $100 billion for the first time in 2010, the Ministry of Industry and Information Technology said on Monday.

The deficit soared more than ten-fold in 10 years. The country’s IC imports of high-end chips with core technologies have risen every year since 2000, leading to a widening IC trade deficit of more than $100 billion in 2010 just from $8.6 billion in 2000, according to the ministry.

Mayor Han Zheng of Shanghai said today he will make an important announcement on the city’s housing policy in a bid to attract young professionals to the city who are unable to afford housing now.

Broadband charges must be slashed if Shanghai is to achieve its aim of becoming a smart city, members of the city’s top political advisory body said on Monday.

“A broadband internet network is also a public infrastructure and the government should lead an effort to reduce the cost to the public,” Professor Han Zhengzhi from the Shanghai Jiao Tong University told the Shanghai Committee of the Chinese People’s Political Consultative Conference.

The amount of foreign direct investment into China in 2010 rose 17.4% from a year ago to $105.74 billion, said Yao Jian, spokesman for the Ministry of Commerce today.

In December alone, the country attracted $14.03 billion, up 15.6% from a year ago month, the figures showed.

Profits at China’s state-owned enterprises increased 37.9% from a year ago to 1.99 trillion yuan in 2010, the Ministry of Finance said on Monday.

Revenues from business reached 30.33 trillion yuan, up 31.1% from a year ago and both profits and business revenue doubled from five years earlier, the ministry said in a statement.

China’s electricity consumption grew 14.56% on an annual basis to more than 4.19 trillion kilowatt hours in 2010, the China Electricity Council said on Monday.

Urban property prices across the country grew for the fourth month in a row in December. Real estate prices in 70 major cities were 6.4% higher in December compared to December 2009, the National Bureau of Statistics said on Monday.

Stock Movers

Banks gained on positive earnings report. While steel makers dropped, metal producers and gold miners had a mixed day.

ICBC gained 0.7% to 4.26 yuan and Agricultural Bank of China rose 0.4% to 2.60 yuan after dropping 2.3% on Monday.

Industrial Bank closed up 2.5% after it said 2010 profit was 40% higher than in 2009. China Construction Bank gained 0.6% to 4.74 yuan after declining 4.1% on Monday.

Shandong Gold Mining added 2.6% to 45.31 yuan while Jiangxi Copper Co edged up 1.7% to 37.65 yuan. China Aluminum Co edged up 0.7% to 9.79 yuan after saying it expects to swing to net profit in 2010.