China Indexes Up, China Construction Gains

123jump.com Staff
03 Dec, 2008
New York City

China stock indexes gained on a rise in telecom and financial stocks. Telecoms advanced on the hopes that 3G licenses will be allocated before the end of the year. Bank of America increased its stake in China Construction Bank. Property stocks declined on a rise in mortgage rates.

[R]6:00AM New York, 6:00PM Hong Kong - Bank of America increases stake in China Construction Banking Corp. to 19.13%.[/R]

In Hong Kong trading Hang Seng Index rose 1.6% or 220.60 to 14,108.84, and the China Enterprises Index of Hong Kong listed mainland share, or H shares, soared 2.6% or 184.21 to 7,391.69. In Shanghai CSI 300 Index gained 1.9% or 34.28 to 1,864.20.

Daily turnover on main-board declined to HK$37.96 billion from HK$38.5 billion yesterday.

Coca Cola Seeks Approval For Acquisition Huiyuan Juice

China Daily reported today that Coca Cola yesterday announced that it has submitted an application to the Ministry of Commerce for its anti-monopoly approval for its $2.3 billion takeover of juice maker China Huiyuan Juice Group.

The company is likely to hear before March 2009 from the regulatory agency. Coca Cola made the bid for the Chinese company at HK$17.9 billion on September 3.

Analysts say it will take the Ministry of Finance much effort to “determine the effects of the deal in light of Coca Cola’s significant share of the low-end juice market and would be-large share in the mid- and high-end market through the transaction.”

Huiyuan owns an estimated 46% of China''s pure fruit juice market.

Bank of America Raises Stake in China Construction

Bank of America shored up its stake in China Construction Bank from 10.8% to 19.13% on November 28 after the company’s stock dropped 40% in the last six months.

The shares were purchased at 40% premium to yesterday’s closing price.

Bank of America is now the second biggest shareholder in China Construction with 44.7% equity. Sovereign wealth fund Central Hujin Investment Co. has a controlling stake with 57.06% equity.

Gainers & Losers

Hong Kong stocks rose led by telecommunication stocks on expectation that 3G licenses will be issued before the end of the year and financials gained after Bank of America increased its stake in China Construction Bank.

China Construction Bank increased 3.4%, ICBC gained 3% and HSBC Holdings edged up 1.7%.

Telecommunication stocks increased. China Unicom soared 5% and China Mobile advanced 2.5%. Centron Telecom rallied 14%, Comba Telecom Systems advanced 29% and China Wireless soared 41%.

Property stocks fell as bank of China said it will increase its mortgage rates by 50 basis points to between 3.5% and 3.75% from December 4. Sun Hung Kai Properties declined 6% and Cheung Kong fell 2.7%.

Hopson Development surged 21.7% after reporting yesterday that it successfully bid for a piece of land in Beijing for Rmb859.2 million.

CITIC Pacific dipped 7.3%.