Energy Stocks Rise on Rebates

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

China is expected to offer most of the value added tax as a rebate to oil refining companies to cover losses from the price control. Stock in Shanghai and Hong Kong edged higher on the news. Power generating companies surged on the hopes that similar rebate may be extended to the sector. Bank of China reported 85% rise in earnings. The earnings news lifted financial stocks but the gains were muted ahead of the U.S. Fed rate decision. China Coal surged on strong earnings.

[R]6:00AM New York, 6:00PM Hong Kong – Bank of China lifts Hang Seng index. China is likely to offer subsidies to oil refining companies to cover losses at pump stations.[/R]

Hong Kong stock averages rose boosted by strong earnings from the Bank of China, and on news that Beijing will provide subsidies to oil companies.

Market sentiment

In Hong Kong trading the Hang Seng Index increased 0.97% or 247.86 at 25,914.15, and the China Enterprises Index of Hong Kong-listed mainland companies, or H shares, advanced 0.71% or 101.17 to 14,297.83.

In Shanghai trading CSI 300 Index increased 1.28% or 47.79 to 3,776.94.

Daily turnover on main-board was HK$88.7 billion compared to HK$73.7 billion yesterday.

ADB provides $105 million for infrastructure development

Xinhua News Agency reported today that the Asian Development Bank will provide a loan of US$105 million for infrastructure development in China''s northwest Xinjiang Uygur Autonomous Region.

The project focuses on three areas in Xinjiang: Alashankou, a trade and transport hub on the border with Kazakhstan, the Kanas scenic region and Yining City.

The project will cost $190 million and local authorities will provide the balance of the loan.

""""We aim to strengthen cross-border trade, tourism development and economic growth to raise living standards while protecting the environment of the poorest, most remote parts of the country,"""" said Amy Leung, Principal Urban Development Specialist of the ADB''s East Asia Department.

Gainers & Losers

Hong Kong stocks advanced buoyed Bank of China, which reported strong earnings growth in the period.

Bank of China gained 1.3% to HK$3.94 after it reported that first quarter profit jumped 85% on strong fee income. Investors were however cautious ahead of the U.S. Federal Reserve rate decision on Wednesday.

PetroChina and Sinopec gained on the news that the government will provide a monthly subsidy to oil companies to cover losses at the pump stations. The subsidy will be a 75% rebate on the 17% value-added taxes on imported crude imports.

CNOOC Ltd increased 2% to HK$14.20 on strong earnings results.

Cell phone maker Foxconn International gained 6.7% to HK$12.72, and China Resources Enterprises increased 4.6% at HK$29.45.

Tsingtao Brewery also gained 5.7% to HK$22.10.

Life insurer Ping An climbed 2.55% to HK$72.50 ahead of its earnings results.

Shares in Chinese power producers jumped after state media reported that China''s top economic planner may submit a proposal to the cabinet within days, seeking assistance for power-generating firms squeezed by soaring coal costs and fixed power rates.

Power producers Huaneng Power International and Datang Power climbed 5.6% to HK$6.26 and 2.8% to HK$5.20 respectively. In addition, Huadian Power increased 7.3% to HK$2.65 despite the 92% fall in first-quarter earnings.

China coal producer Yanzhou Coal Mining gained 4.3% to HK$14.42 after the firm reported strong first quarter on rising commodity prices. China Shenhua Energy declined 4% to HK$36.15 after mining giant Anglo-American disposed its 4.58% equity in the company.