China Life and PetroChina Decline

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

China Life Insurance reported first quarter earnings declined 61% on recent weakness in stock market volatility. Earnings in the quarter fell to 3.47 billion yuan from 8.89 billion yuan on 5.5 billion yuan loss in its investment portfolio. China Life relies on the stock market gains for most of its portfolio and Shanghai market has lost nearly 33% of its value in the quarter. Gross premium in the quarter rose 39.5% to 101.5 billion yuan. Bank of China earnings rose 85%.

[R]6:00AM New York, 6:00PM Hong Kong - China Life Profit Slumps 61% and PetroChina earnings decline 32%.[/R]

Market sentiment

In Hong Kong trading the Hang Seng Index rose 0.59% or 149.51at 25,666.29, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, dropped 0.18% or 24.96 at 14,196.66.

In Shanghai trading, CSI 300 Index plunged 1.94% or 73.92 at 3,729.15.

Daily turnover on main-board was HK$41.3 billion compared to HK$51.8 billion on Friday last week.

Hong Kong to cut tax on environmentally friendly machinery

Xinhua News Agency reported today that the Hong Kong Special Administrative Region (HKSAR) government said yesterday Hong Kong will soon introduce one-time and accelerated tax cuts for environment-friendly machinery and installations.

Environmental protection machinery encompasses low noise construction machinery or plants registered under the Quality Powered Mechanical Equipment system, waste treatment, wastewater treatment and air pollution control machinery or plant.

""A 100% deduction under profits tax will be provided in the year of purchase for the capital expenditure incurred on the provision of eligible machinery.
""A deduction under profits tax for 20% of the capital expenditure incurred on the construction of eligible installations will be provided in each of the five years starting from the year of acquisition,” the report quoted a government spokesman.

According to HKSAR government statement, the reductions will also be available to those who own or have been using environmental protection machinery or installations before implementation of the proposal.

China to maintain 10% growth

Separately, the online edition reported that the Chinese Academy of Social Sciences (CASS) forecasted a 10.7% growth in the country''s gross domestic product in 2008, albeit at a slower pace than the previous year.

CASS explained that the added value of the agricultural sector would increase by 3.2%, while industrial and service industries will be 12.2% and 10.9% respectively.

The fixed assets investment is projected to increase 19.1% year-on-year to Rmb17.03 trillion yuan.

Although prices are expected to decline in the latter half of the year, commodity retail price index and the CPI is forecasted at 4.4% and 5.5% correspondingly.

The report added that annual per capita disposable income in urban areas will rise 11.1%, and that in rural areas will advance by 7.3% but lower than in 2007.

Total retail sales of consumer goods will rise to Rmb10.46 trillion and import and export growth will slow down to 23.3% and 19% because of the uncertainties in international economy.

Trade surplus is expected to reach $270 billion.

Gainers & Losers

Financial led the rally in the broader market after investment bank UBS upgraded U.S. bank stocks. However China Life and Sinopec declined on poor earnings.

CNOOC climbed 3.6% to HK$13.74 ahead of its earnings release after the market close.

China Construction Bank jumped 2.5% to HK$6.93 after it posted a net profit of Rmb 32.1 billion in the first quarter of 2008 and the Bank of Communications increased nearly 2% to HK$11.36 ahead of its first-quarter earnings report tomorrow.

China Life Insurance Co declined 3.3% to HK$32.70 after it reported a 61% decline in first-quarter profits and Ping An slipped 2.3% to HK$70.15.

Refiner Sinopec Corp declined 3% to HK$8.03 after it posted a 69% fall in first-quarter net profit yesterday.

Foxconn International also advanced 2.3% to HK$11.58 after client Samsung Electronics profits rose 37% last week.