Market news
China’s Stock Index Climbs After Rate Increase; Insurers Gain
http://noir.bloomberg.com/apps/news?pid=20601089&sid=adKdFlPKxyTU
China’s benchmark stock index rose to a six-month high on speculation the nation’s first interest- rate increase since 2007 will help tame inflation and contain asset bubbles. China Life Insurance Co. and Ping An Insurance (Group) Co. rose more than 4 percent after Mirae Asset Securities said insurers will outperform in a rising rate environment. Liquor maker Kweichow Moutai Co. and Tsingtao Brewery Co. led gains among consumer stocks that are less dependent on the economy. China Vanke Co. and Poly Real Estate Group Co. slumped at least 6 percent as higher borrowing costs may deter demand for housing.
Most Asia Markets Fall on China Move
http://online.wsj.com/article/SB10001424052702304510704575562950317517416.html
Most Asian markets ended lower Wednesday after a surprise interest rate increase by China late Tuesday sparked a sell-off in global equity and commodity markets. But Chinese shares ended a bit higher after a drop in the opening minutes of trade, on hopes the mainland economy would continue to grow at a fast clip and that fund inflows would keep equities supported. The recovery helped South Korean and Taiwanese shares erase initial declines and some other markets pare losses.
China Rate Move May Lure Capital, Complicating Policy
http://noir.bloomberg.com/apps/news?pid=20601089&sid=aKR30gtTlQyA
China’s decision to raise interest rates to combat inflation may have the opposite effect by luring more capital into the world’s fastest-growing major economy. The central bank yesterday unexpectedly raised borrowing costs for the first time since 2007, lifting the benchmark one- year lending rate to 5.56 percent from 5.31 percent. The deposit rate was increased to 2.5 percent from 2.25 percent.
Buy China Stocks on ’Dips’ After Rates, Goldman Says
http://noir.bloomberg.com/apps/news?pid=20601089&sid=aX9i.J0h50jQ
Investors should buy Chinese stocks on any “dips” following an interest-rate increase in the nation, Goldman Sachs Group Inc. said. Higher rates are a “positive” signal for equities, JPMorgan Chase & Co. said. The central bank yesterday unexpectedly raised borrowing costs for the first time since 2007, lifting the benchmark one- year lending rate to 5.56 percent from 5.31 percent. The deposit rate was increased to 2.5 percent from 2.25 percent.
Industry news
China becomes global leader in clean energy: study
http://www.chinadaily.com.cn/business/2010-10/20/content_11434384.htm
China has become a leader in clean energy efforts, outstripping the United States and Japan, and leaving Australia lagging far behind, a study commissioned by the Australia’s Climate Institute showed on Tuesday. Global research unveiled countries including Britain, China and the US already have set up a higher direct and indirect carbon pricing.
Housing market hit by new rules
http://www.chinadaily.com.cn/business/2010-10/20/content_11433761.htm
14 cities put caps on purchases for residents and on housing loans. GUANGZHOU – Property sales have seen a sharp drop and there’s been an increase in the number of cancellations of home orders in Chinese cities that have introduced regulations to limit purchases of property. [Property tycoons suffer decline in their wealth] Dalian, in Liaoning province, is the latest to join in this move to control the rampant property market. On Tuesday, it suspended second-home purchases for families who are residents, while denying new home loans for migrant families who have not worked in the city for at least one year, said a local official.
Hedge Funds Eye Japan, China, Australia for Distressed Assets
http://noir.bloomberg.com/apps/news?pid=20601089&sid=acFcqkWLOve8
Hedge funds seeking distressed assets in Asia may find the best opportunities in Japan, China and Australia next year as banks sell soured loans, and small and medium-sized businesses struggle to attract funding. Japan, China and Australia form the bulk of the $1 trillion of corporate debt that is distressed or stressed in Asia as banks balk at lending to smaller companies and sell non- performing loans, Robert Appleby, chief investment officer at ADM Capital, said at a conference in Hong Kong yesterday.
China to boost natural gas pipelines network
http://www.chinadaily.com.cn/business/2010-10/20/content_11435212.htm
China will triple the total length of its natural gas pipelines in the next five years to meet rising demand, said industry insiders. The total length of natural gas pipelines in the country will reach 100,000 km by the end of 2015, compared with 36,000 km by the end of 2010, said Yang Jianhong, deputy director of the oil and gas pipeline department at the China Petroleum Planning and Engineering Institute.
Company news
Li Ka-Shing Said to Drop Out of U.K. Rail-Link Bid
http://noir.bloomberg.com/apps/news?pid=20601089&sid=aH8Z.TkyZA9I
Hong Kong billionaire Li Ka-Shing’s Cheung Kong Infrastructure Holdings Ltd. dropped out as a potential bidder for Britain’s high-speed rail link to the Channel Tunnel, said two people with knowledge of the matter. Cheung Kong Infrastructure, which has studied the asset and expressed initial interest, decided it probably won’t make a formal bid, said the people, who declined to be identified because the discussions are private. Final offers are due by the end of the month, one of the people said.
China Mobile Reports 3.9% Rise in Net Profit
http://online.wsj.com/article/SB10001424052702304741404575563673479886104.html
China Mobile Ltd., the world’s largest mobile carrier by subscribers, said Wednesday its net profit for the January-September period rose 3.9% from a year earlier because its third-generation mobile services business grew, though competition intensified. The wireless operator’s net profit for the nine months ended Sept. 30 was 87.25 billion (US$13.13 billion), up from 83.94 billion yuan.
China Overseas Q3 operating profit nearly doubles
http://www.chinadaily.com.cn/business/2010-10/20/content_11436169.htm
China Overseas Land & Investment Ltd, the country’s top developer by market value, posted a near doubling of operating profit in its third quarter and appears on track to achieve its full-year sales target despite tightening policies, Reuters reported on Wednesday. China Overseas Land reported an operating profit of HK$3.4 billion ($436 million) in the July-September period, up 89 percent from HK$1.8 billion from a year earlier, according to company figures.
Fonterra plans dairy farm in Hebei
http://www.chinadaily.com.cn/business/2010-10/20/content_11435662.htm
New Zealand’s Fonterra Cooperative Group Ltd, has agreed to develop a dairy farm in Yutian, Hebei province to expand milk production in China, Bloomberg reported on Wednesday. The farm will hold 3,000 cows imported from New Zealand, the world’s largest dairy exporter said in a statement. Fonterra will invest NZ$42 million ($31 million) in the project, it said.
Ad sellers claim Google’s compensation
http://www.chinadaily.com.cn/business/2010-10/20/content_11433845.htm
Ad resellers threaten action over ‘lost compensation’ claims. BEIJING – Seven Google advertising resellers in China said on Tuesday that they will take “legal action” against the search engine if it does not fulfill their demands, which include compensation and an investigation into alleged internal corruption concerning the company’s employees. The dispute underlines the growing tensions between Google and its domestic advertising distributors, which arose after the United States-based company changed its strategy in China earlier this year and redirected users to its Hong Kong site.
China Southern Rises on 15-Fold Profit Jump Forecast
http://noir.bloomberg.com/apps/news?pid=20601089&sid=aNXp57cvIJI4
China Southern Airlines Co., the nation’s biggest carrier, led airlines higher in Shanghai trading after saying nine-month profit probably rose more than 15-fold. The airline rose 1.8 percent to 11.45 yuan at the close of trading, after earlier gaining as much as 8.1 percent. China Eastern Airlines Corp. climbed 2.2 percent to 8.97 yuan. Air China Ltd. jumped 1.8 percent to 15.79 yuan.
NetSpend IPO Beats a China One
http://online.wsj.com/article/SB10001424052702304510704575562043516188972.html
Initial public offering investor expectations were upended Tuesday when a Chinese deal that was highly anticipated declined during its debut and a U.S. debit-card company that was dogged by its bank partner’s regulatory issues made trading gains. Shanghai-based ShangPharma Corp. traded down while U.S. debit-card company NetSpend Holdings Inc. rose on their first day as public stocks in the U.S. Both companies priced their IPOs at the midpoint of their expected ranges.
