China Stocks Fall; 3G licenses, BoA Sells Stake

123jump.com Staff
07 Jan, 2009
New York City

China issues 3G licenses to three mobile operators. Bank of America sells $2.83 billion stake in Construction Bank of China and lowers its stake to above 16%. The benchmark Stock index in Hong Kong fell 3.4% and in Shanghai edged 0.6% lower. Telecom stocks fell on profit taking.

[R]6:00 AM New York, 6:00PM Hong Kong - China issues 3G licenses to three mobile operators. Bank of America sells $2.83 billion stake in Construction Bank of China.[/R]

Market Sentiment

In Hong Kong trading Hang Seng Index fell 3.4% or 522.05 to 14,987.46, and the China Enterprises Index of Hong Kong listed mainland shares, or H shares, declined 4.6% or 399.83 to 8,224.68. In Shanghai trading CSI 300 Index fell 0.6% or 11.62 to 1,931.18.

Daily turnover on main-board surged to HK$90 billion from HK$53.9 billion yesterday.

China issues 3G Licenses

Xinhua News Agency reported today that China’s ministry of industry and information technology issued 3G licenses to three mobile operators.

China Mobile was awarded a license for the locally developed 3G standard, TD-SCDMA, while China Telecom and China Unicom, received licenses for the U.S.-developed CDMA2000 and Europe''s WCDMA, respectively.

WCDMA and CDMA2000 are the latest third generation standards used in the Americas and Europe and Africa but Beijing has reiterated its support for the locally developed TD-SCDMA.

An estimated $41 billion will be sunk into building new networks.

MIIT issued 23 regulations on requirements of 3G network operation that include consumer rights, user information, security, telecommunication charges, market competition and facility building.

China’s State Council approved the issue of 3G license on December 31.

Gainers & Losers

Hong Kong stocks plunged led by financial and telecommunication stocks after Bank of America sold its stake in China Construction Bank and investors locked in gains as the government issued 3G licenses.

China Mobile fell 5.5% to HK$78.45 after China handed the company a license to introduce the untested homegrown TD-SCDMA network.

China Unicom fell 10.6% and China Telecom declined 5% on profit taking after a rally in the previous trading sessions.

ZTE fell 8.5% and China Communications Construction dropped 7.2%.

Foxconn International Holdings, the largest electronic subcontractor gained 5.4%.

Citic Pacific rose 6.4%.

China Construction Bank declined 8.8% to HK$4.06 after Bank of America sold 5.6 billion shares or 13% of its equity in China Construction Bank at a 12% discount at HK$3.92 per share.

ICBC plunged 7.3%.

Semiconductor Manufacturing International Corp advanced 2.9% on news that the company is planning to sell a stake to Intel Corp.

Shanghai Electric Group dropped 13.2% after cutting its full-year profit forecast for 2008 by 10% to 13% of the earlier projected Rmb2.9 billion made in November.

Bank of America Sells $2.83 billion Stake

U.S. lender Bank of America reported today that it has offloaded 5.62 million shares or 13% of its holdings in China Construction Bank at HK$3.92 per share, a 12% discount to Tuesday’s closing price.

After the sale, Bank of America remains will have16.6% stake.