Ping An, Refiners Lift HK Stocks

123jump.com Staff
21 Apr, 2008
New York City

Ping An is reported to have scrapped its plan to sell stock in public offering and instead sell them a private placement through banks. Ping An rose 5%. Sinopec estimated first quarter profit is likely to fall 50% from a year ago on rising crude oil cost. Separately, China is expected to reimburse refiners taxes on crude oil import and significant losses from the price ceiling. Chinese refiners are required to sell petrol at a price fixed by the government. In addition COSCO jumped 7%.

[R]6:00AM New York, 6:00PM Hong Kong - China to subsidize refiners for losses from high cost of crude oil in the international markets. Ping An gained 5% after it scrapped its plan to offer stocks in retail offering but sell them in a private placement.][/R]

Stocks in Hong rose trekking the advance in larger markets in the region on the optimism that weakness in U.S. residential market and banking sector may not spread to the wider economy and drag global economy.

In Hong Kong trading Hang Seng Index rose 2.17% or 523.89 to 24,721.67, and the China Enterprises Index of Hong Kong-listed companies, or H shares, advanced 2.68% or 339.82 at 13,015.25.

In Shanghai trading, CSI 300 Index fell 0.15% or 4.95 at 3,267.55.

Daily turnover on main-board was HK$81.29 billion compared with HK$79.89 billion on Friday last week.

Chinese refiners to get subsidies for losses

Xinhua News Agency reported today that according to separate statements from China Petroleum and Chemical Corp. (Sinopec) and PetroChina. Co., the two companies will receive """"appropriate"""" monthly subsidies for losses retroactive to April 1.

Oil refiners’ margins have been squeezed by rising oil prices and a government lid on petroleum. Crude oil prices rose to a record $117 per barrel.

In addition, the government will refund value-added tax (VAT) levied on some of PetroChina and Sinopec''s imported oil products in the second quarter.

Sinopec profits to fall by 50%

Separately, China Petroleum and Chemical Corporation (Sinopec) said in its preliminary estimation the company’s net profit is expected to fall by more than 50% in the first quarter of 2008 from a year ago.

Sinopec blamed the losses to steep rise in crude oil in the international market and a cap on the prices of petroleum products that was imposed by the Government.

Recently the ministry of finance announced early this week a tax rebate to oil companies to limit their refining losses.

Through the new dispensation, Sinopec will get a rebate on imports of 500,000 tons of gasoline and 1.5 million tons of diesel from April 1 to June 30 this year.

Gainers & Losers

Insurance company Ping An gained 5% on news reports that the insurer has opted to place shares to selected banks, including China Construction Bank, instead of selling them to the public.

Also, China Life gained 3.65% on hopes that insurance firms could benefit from buying non-tradeable Chinese shares through private placements.

Oil refiners rose after two biggest oil refiners reported today that the government will subsidize losses in the current quarter. COSCO increased 6.96% ahead of its results on Tuesday.

Sinopec Corp spiked 1.77 % and PetroChina rose 3.05% on the news.

HSBC rose 1.3% after Citigroup reported last week that its loss of $1.02 per share was less than the $1.66 that had been forecasted earlier.

China Mobile advanced 2.43% ahead of its results today.

Hong Kong Exchanges and Clearing increased 4.64% and Li & Fung gained 4.38% on speculation subprime-related losses may not rise any more.

Automaker Dongfeng Group jumped 8.7% after forecasting that its 2008 revenue will rise 10% and earnings will exceed the 2007 level.

China Southern Airlines added 2.2% after the company reported a profit increase of 523% year-on-year rise to Rmb796 million in the first quarter.

GOME Electrical Appliances declined 6.24% on news that its controlling shareholder Wong Kwong Yu planned to sell HK$2.13 billion worth of existing shares to six independent investors.