China Lowers Exposure to U.S. Debt; Cnooc Deals

Mayank Mehta
15 Mar, 2010
New York City

China lowered its exposure to the U.S. bonds for the third month in a row in January but still retained the top holder of the U.S. government debt. CNOOC agreed to acquire a stake in Argentina based oil company for $3.1 with operations in Latin America.

[R]9:00 PM Hong Kong, China – China lowered its exposure to the U.S. bonds for the third month in a row in January but still retained the top holder of the U.S. government debt. CNOOC agreed to acquire a stake in Argentina based oil company for $3.1 with operations in Latin America.[/R]

China lowered its holdings of the U.S. Treasury securities for the third month in a row according to the latest report released by the U.S. Treasury on Friday.

China lowered its net holdings by $5.8 billion in January after selling $34 billion of the U.S. bonds in December to $889 billion. China is still the largest holder of U.S. government debt followed by Japan with a net holding of $765.4 billion.

Hang Seng index in Hong Kong decreased 130.64 or 0.62% to 21,079.10, and CSI 300 index in China lower 49.94 or 1.54% to 3,183.18.

Shanghai Movers

Air China Limited dropped 1.8% to 10.95 yuan after the airline reported last week of a public offering to raise as much as $800 million and lower its debt.

Baoshan Iron & Steel Co., Ltd declined 2.6% to 8.13 yuan after the steelmaker and the European Confederation of iron and Steel Industries expressed their outrage after iron ore miners in Australia sought 90% price increase.

China Construction Bank Corporation fell 1.2% to 5.54 yuan.

China Shenhua Energy Company Limited decreased 2.1% to 28.14 yuan after the coal producer announced that it will pay a cash dividend of 0.53 yuan a share or 10.541 billion yuan in total to the shareholders for fiscal year 2009.

China Southern Airlines Company Limited fell 2.9% to 6.59 yuan after the carrier expects financial results in the year to be better than in the year ago according to its Chairman Si Xianmin said quoted by Reuters.

Cnooc Ltd agreed to acquire 50% stake in a unit controlled Argentina based Bridas Energy Holdings Ltd for $3.1 billion. The joint venture will hold equal share in Bridas Corp with explorations rights and production in Argentina, Chile and Bolivia through its 40% interest in Pan American Energy LLC.

The proven reserves held by Bridas Corp are around 636 million barrels of oil equivalent and daily output of 92,000 barrels of oil equivalent. The deal values the company at $10 a barrel.

Cnooc Ltd decreased 0.45% to HK$12.82 in Hong Kong trading.

Hebei Iron and Steel Co., Ltd dropped 3% to 5.45 yuan. The steelmaker plans to purchase an 80% stake in Shijiazhuang Iron & Steel Co Ltd for 1.9 billion yuan according to Yan Shengke its chairman.

Industrial Bank Co., Ltd decreased 2.4% to 34.41 yuan.