Markets in HK, Shanghai Rise; Geely Up

Mayank Mehta
29 Mar, 2010
New York City

The benchmark indexes in Shanghai and in Hong Kong surged on strong earnings from China Construction Bank and China Resources Land Ltd. Geely completed the purchase of Volvo Cars from Ford Motor Company for $1.8 billion. PetroChina plans $60 billion of overseas expansion.

[R]5:00 AM Hong Kong, China – The benchmark indexes in Shanghai and in Hong Kong surged on strong earnings from China Construction Bank and China Resources Land Ltd. Geely completed the purchase of Volvo Cars from Ford Motor Company for $1.8 billion. PetroChina plans $60 billion of overseas expansion.[/R]

Zhejiang Geely Holding Co agreed to acquire Volvo Cars from Ford Motor Company for $1.8 billion. The deal terms are set for $200 million note and the rest in cash adjusted for pension deficit, debt and working capital. Ford may see as little as $500 million cash after adjustments.

In Monday’s trading the Hang Seng index in Hong Kong increased 184.32 or 0.88% to 21,237.43, and the CSI 300 index in China higher 83.54 or 2.55% to 3,358.54.

China Construction Bank Corp reported profits in the fourth quarter surged two-fold after bad loans declined and new loans increased on the back of China government stimulus.

American International Group Inc completed the sale of its investment arm PineBridge Investments for $500 million to Pacific Century Group after three months of deal negotiations.

Shanghai Movers

Aluminum Corporation of China Limited added 1.8% to 13.10 yuan after the producer of alumina said 2009 revenues fell 8% to 70.3 billion yuan from 76.7 billion yuan a year ago. Net loss in the year was 4.65 billion yuan or 0.34 yuan per diluted share compared to net profit of 19.5 million yuan or break even per share a year ago.

China Construction Bank Corporation advanced 2.3% to 5.71 yuan after the commercial bank said 2009 net interest income fell 6% to Rmb 211.9 billion from Rmb 224.9 billion a year ago. Net profit in the year rose 15.3% to Rmb 106.8 billion or Rmb 0.46 per diluted share compared to net profit of Rmb 92.6 million or Rmb 0.40 per share a year ago.

China Petroleum & Chemical Corporation climbed 1.7% to 12.00 yuan after the energy and chemical company said 2009 revenues fell 10% to Rmb 1.35 trillion from Rmb 1.50 trillion a year ago. Net profit in the year rose 117% to Rmb 61.8 billion or Rmb 0.71 per diluted share compared to net profit of Rmb 28.5 million or Rmb 0.33 per share a year ago.

PetroChina Company Limited rose 1.2% to 12.93 yuan after the oil producer plans to spend at least $60 billion in the next decade on overseas acquisitions challenging Exxon Mobil Corp. and BP Plc in the race to control oil and gas fields.

HK Movers

China Resources Land Limited gained 5.1% to HK$16.48 after the company engaged in property development and management said net profit more than doubled in 2009 to HK$4.41 billion on the China stimulus that lifted demand and prices.

China Shipping Development Company Limited fell 4.1% to HK$12.80 after the shipping group reported 2009 net profit dropped 80%.

Geely Automobile Holdings Limited rose 1.7% to HK$4.17 after the automaker completed the purchase of Volvo unit from Ford Motor Company for $1.8 billion.

Flyke on its first day of trading in Hong Kong surged 14% to HK$2.16 after it placed 200 million shares at HK$1.90 each and raised HK$363.90 million.

Jiangxi Copper Company Limited added 2.5% to HK$16.98.