OCCL Drops, China Stocks Weak

123jump.com Staff
31 Jul, 2008
New York City

Stocks in Hong Kong and Shanghai traded weak as financials and export sensitive sectors declined. OCCL, a container company stock fell 11% after it reported first half revenue rose 27.4% and profit plunged nearly 95%. The previous year period included one-time gain from a sale of terminal division, excluding the gains, earnings in the period dropped 30% before tax.

[R]6:00AM New York, 6:00PM Hong Kong - Commodities lift Hang Seng index but CSI 300 index in Shanghai falls. OCCL drops on weak earnings on rising fuel cost.[/R]

Hong Kong market averages rose spurred by rising crude oil prices.

Market Sentiment

In Hong Kong trading Hang Seng Index rose 0.18% or 40.5 at 22,731.10, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, increased 0.30% or 37.48 at 12,506.74. In Shanghai trading CSI 300 Index slumped 2.74% or 79.17 at 2,805.21.

Daily turnover on main-board was HK$56.5 billion compared with HK$53.3 billion yesterday.

Macao Trade Deficit Tops 12.91 Billion Patacas in H1

The Statistics and the Census Service of the Special Administration Region reported today that Macao recorded a trade deficit of 12.91 billion patacas in the first six months of the year, as the exports and imports ration fell to 39.8% from 47.6% the same period a year ago.

According to the statistics, total exports declined 10.7% on the year to 8.53 billion patacas, with domestic exports and re-exports plummeting by 11.8% and 8.7% correspondingly and imports of goods rising by 6.9% to 21.45 billion patacas.

Textile and garment exports fell 15.8%, contributing 59.9% of the total exports of goods in the first half year of 2008. Authorities also noted that the value of non-textile exports slipped by 1.7% and exports of machines and apparatus and footwear fell 50.8% and 56.3% respectively.

In addition, exports of image and sound appliances advanced by 69.2%.

In the period, exports to the United States fell 6.3%, while shipments to China dropped 40.3%.

Imports from mainland China and Hong Kong contributed 51.9% of total imports.

China Distance Education Holdings Lists on NYSE

Xinhua News Agency reported on its Web site today that the Chinese distance education agency China Distance Education Holdings listed on the NYSEArca trading platform, which is the NYSE Euronext’s fully electronic market for emerging issuers.

The company was listed its American Depositary Shares under the ticker symbol ""DL"" after it raised US$61.25 million. China Distance Education has 13 distance education websites and last year it earned $11.8 million.

Gainers & Losers

Shares in Hong Kong rose as oil prices climbed in the region’s trading. CNOOC rose 3.7% after crude oil prices crossed $126 a barrel, but refiner Sinopec declined 1.8%.

COSCO rose 5.5% after JP Morgan upgraded the stock following reports by Nomura, a Japanese bank, the company is poised for inclusion in a blue-chip index to be reviewed in August.

Hong Kong Exchanges & Clearing declined 0.2% after Credit Suisse downgraded the stock to “underperform” from “neutral”.

Financial stocks also gained after the US Federal Reserve Bank, the European Central Bank and the Swiss National Bank in coordinated move injected liquidity in the world financial system. HSBC increased 0.3%.

China Mobile declined 0.7% on the anxieties over China Telecom’s plans to dominant the mobile telecommunication market.


OCCL Drops On Earnings Decline

Oriental Overseas International fell 11.2% after the company’s profits in the first half ending in June 30 dropped to $158.3 million from a year ago profit of 2.216 billion. The previous year profit included gain on $1.99 billion from the sale of terminal division. Revenue in the period rose 27.4% to $3.203 billion and earnings per share from continuing operations fell to 25.3 cents from 36.7 cents.

In the first half the company took the delivery of three 4,506 TEU new vessels and no new orders were placed in the period. The company is arranging financing for twelve more vessels.

OOCL had a 12.8% increase in capacity for the first half of 2008 as compared with the same period last year from the nine vessels added to the fleet in 2007 and the three 4,506 TEU vessels delivered from Samsung during the first half of 2008.

OOCL accounted for 99% of Group turnover, and had revenue of $3,175.7 for the first six months of 2008 being a $674.4 million or 27% increase over that in the 2007 half year.

The improved revenue was, however, largely matched by increased costs due to higher oil prices. High energy prices were felt both directly through higher bunker fuel costs and indirectly through higher terminal and third-party transportation costs in North American railroad charges.

The average bunker oil price paid for the first half of 2008 was $502 per ton, which was 64% higher than the $306 per ton recorded in the same period of 2007. Bunker oil now represents 79% of voyage costs versus 70% during the first half of 2007.

The chairman C.C.Tung noted that “while higher bunker fuel costs are increasingly mitigated through separate bunker surcharges and operational adjustments, base freight rates need to adjust to cover the less transparent increase in other operating costs. The introduction of a separate floating bunker charge into a majority of contracts for Trans-Pacific services during the 2008 contract negotiations is a positive development in achieving improved bunker cost recovery.”

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 9.02 or 0.07% to 13,376.81, Hang Seng index in Hong Kong increased 40.50 or 0.18% closed to 22,731.10. ASX 200 index in Australia increased 40.70 or 0.82% to close 4,977.40. The KL Composite index in Malaysia increased 3.15 or 0.27% closed to 1,163.09.

The Kospi Index in South Korea increased 16.97 or 1.08% to close at 1,594.67, SET index in Thailand closed higher 6.42 or 0.96% to 676.32 and JSE Index in Indonesia increased 25.82 or 1.13% to 2,304.51. The Sensex index in India increased 68.54 or 0.48% to 14,355.75.