Hang Seng Advanced 1.4%; China Tianrui IPO Soared 26%

Nigel Thomas
23 Dec, 2011
New York City

Stocks in Hong Kong closed higher and retained the positive bias in the last three days. The Hang Seng index increased 1.4% and for the week declined 1.9%. The cement maker China Tianrui soared 26% on its first day of trading.

[R]6:00 PM Hong Kong – Stocks in Hong Kong closed higher and retained the positive bias in the last three days. The Hang Seng index increased 1.4% and for the week declined 1.9%. The cement maker China Tianrui soared 26% on its first day of trading.[/R]

Stocks in Hong Kong traded higher and retained the positive bias of the week. Sentiment in trading was buoyant after U.S. weekly jobless claims declined to the low last seen in April 2008.

The Hang Seng Index increased 1.4% to 18,629.17 and the index for the week increased 1.9%. Of the 48 stocks in the index, 3 declined and the rest increased. For the year the Hang Seng index is down 19%.

Resource stocks were higher after China based Yanzhou Coal offered a complex merger arrangement with Australia based coal miner.

Gloucester Valued $2.2 Billion by Yanzhou Coal

Gloucester Coal Limited soared 22% after China based Yanzhou Coal issued a merger proposal of $3.20 a share in cash and stock valued as much as $6.96 in a new company.

The complex merger values the company as much as $2.2 billion and will provide cash to shareholders in two stages. After the completion of the merger agreement in six months shareholders will receive $2.64 of cash held on the balance sheet and a special dividend of 56 cents a share in the next six months.

The merged entity of coal properties in China and in Australia will have 77% shares controlled by Yanzhou Coal and 23% controlled by existing Gloucester shareholders.

Stock Movers

Li & Fung increased 18 cents to $14.32 as exporters in the region gained.

HSBC Holdings Plc added 1.4% to HK$59.75 tracking the gains in the UK and China based bank traded higher in Europe.

Resource stocks gained after crude oil increased more than 1% in New York trading. CNOOC increased 38 cents to $13.72 and PetroChina Company increased 11 cents to $9.48. China Petroleum & Chemical Corporation added 11 cents to $8.31.

China Mobile Ltd increased 70 cents to $74.30 and China Unicom Limited added 22 cents to $16.52.

China Tianrui soared 26% to HK$3.05 on its first day of trading after the Henan and Liaoning provinces based cement maker priced 400.9 million shares at $2.41 a share and raised HK$966.16 million or $124.1 million.