Hong Kong Stock Market Wrap Aug 11th, 2009

HSI 21,074.21 +144.69 +0.69% : HSCEI 11,988.79 +0.7% : Market Turnover HK$65.67bn

The Hang Seng Index finished 144.69 points higher at 21,074.21, ending above 21,000 point for the first time since last September. Shares rose 0.7 percent to finish near a 12-month closing high as key data releases from China were in line with expectations. The China Enterprises Index was up 0.7 percent at 11,988.79. Turnover shrank sharply, to HK$65.67 billion. Mainland stocks rose 0.46 percent, ending a four-session losing streak, with property shares firm as China's economic recovery still appeared intact. Sentiment remained cautious after the recent pullback in part by concerns about tightening market liquidity that were confirmed by a sharp fall in new bank lending data for July.

Resources: China’s National Development and Reform Commission has commissioned China Shenhua (1088 HK) to construct 10 coal storage facilities across the country. Sino Gold Mining (1862 HK) was forced to halt operations of a gold mining project, after a group of twenty Chinese farmers, affected by the rumor over alleged water contamination, blocked road access to the White Mountain mine in Jilin province. The farmers have returned home yesterday, but the gold mine’s operations will remain suspended until the dispute between the mine and nearby villagers is settled. CNOOC (883 HK) and CNPC (135 HK) are planning to join forces to bid for the Argentine unit of Repsol YPF SA, Spain’s largest oil producer. They reportedly plan to pay US$17 billion (HK$131 billion) for Repsol YPF’s entire stake in the unit.

Powers: Huadian Power (1071 HK), the largest electricity provider in Shandong province, reported a net profit of 545 million yuan in the first half, against a loss of 506 million yuan in the year-earlier period. Huaneng Power (902 HK), China’s largest power firm, its first-half net profit amounted to 1.87 billion yuan, the increased came from two tariff hikes in the second half of last year and lower fuel costs. The company reported a first-half net loss of 544 million yuan a year earlier.

Banks: Bank of East Asia (23 HK), Hong Kong’s fifth-largest lender, is planning to list in Shanghai by the second half of next year. The lender is in talks with mainland regulators on the requirements for a possible listing.

Properties: MTR (66 HK) underlying income for the six months ended June jumped 43 per cent to HK$3.9 billion on surging property sales, beating the highest forecast of HK$2.8 billion. Profit including investments and property revaluation fell 4 per cent to HK$4.5 billion. An interim dividend of 14 HK cents was declared, the same as last year. Shanghai-focused developer Shui On Land (272 HK) has issued a profit warning, expecting net profit for the six months ended June to drop significantly from a year earlier.

Shipping: Pacific Basin (2343 HK) Shipping, one of the world’s largest dry bulk operators, reported net profit for the first half was HK$74.8 million, tumbling 78 per cent from HK$338 million a year ago. Earnings per share were 4.19 US cents. The company attributes the slump to overcapacity in the global fleet that affected rates. The shipping carrier plans to spend US$439 million on new vessels in the coming three years.

Sources: Sing Tao Finance, Hong Kong Economic Journal, Hong Kong Economic Times