China Market Wrap-01DEC2012

Shanghai’s stock index closed up 2.3 percent at 2,386.9 points on Thursday, posting the biggest percentage rise in 5 weeks and with banking stocks up sharply, after the central bank announced a cut in banks’ reserve requirement ratios (RRR).
Hong Kong shares closed up 5.63 percent at 19,002.26 points, surging in robust volume after Beijing signalled a policy shift late on Wednesday with its first RRR cut in three years.

• A-shares
– Baosteel Group Corporation, the parent of China’s Baoshan Iron & Steel<600019.SS>, was the seller in a $267 million sale of China Construction Bank Corp <0939.HK> shares earlier this week, two sources with direct knowledge of the transaction told Reuters on Thursday.

– Agricultural Bank of China Ltd <601288.SS><1288.HK> said its Agricultural Bank of China (UK) Ltd and Seoul Branch of the bank have been granted their business licenses by the regulatory authorities in their respective jurisdictions.

– China’s big four state banks extended 140 billion yuan ($22.00 billion) in new loans in the first 28 days of November, far under market expectations and October’s full-month amount of 240 billion yuan, the official China Securities Journal reported on Friday .

• H-shares

– Tough regulations will curb Standard Chartered Plc‘s <STAN.L><2888.HK> profitability in the next two or three years but should help pave the way for “remarkable” medium-term growth as European rivals retreat from Asia, its finance boss told Reuters.
– U.S. luxury handbag maker Coach Inc <COH.N><6388.HK>  dropped in its trading debut in Hong Kong on Thursday as thin volume in its depositary receipts limited their appeal to local investors.

– Sands China Ltd <1928.HK>, Wynn Macau Ltd <1128.HK> and MGM China Holdings Ltd <2282.HK> are seen to be in focus after Macau, the world’s largest gambling destination, posted a 32.9 percent rise in November gaming revenue to 23 billion patacas ($2.9 billion), buoyed by a rising tide of Chinese gamblers to the glitzy enclave, despite deep-set global economic uncertainties.

– The world’s top aluminium producer UC RUSAL <0486.HK> said on Thursday it had finished redesigning its Volkhov smelter, Russia’s first aluminium plant, built in 1932, raising its annual capacity to 32,000 tonnes from 24,000 tonnes.

 A shareholder is selling 50 million shares of Belle International Holdings <1880.HK> at a range of HK$14.30-HK$14.60 per share, or 4.1 to 6 percent discount to the previous close. for about $93 million, Morgan Stanley is the sole bookrunner of the deal, according to a term sheet obtained by Reuters.

– CSR Corporation Ltd <1766.HK> said it had entered into several major contracts with parties including Ministry of Railways, China Shenhua Energy Co Ltd, China Railway Container Company, Mongolian People’s Republic and UAE Union Railway Company, with an aggregate value of about 5.87 billion yuan.

– Huadian Power International Corporation Ltd <1071.HK> said the weighted average on-grid tariff of the units under the company would be adjusted upward by about RMB2.68 cents/KWH, in a bid to alleviate the impact of coal price increase on the cost of power generation, and the adjusted tariff would come into effect on December 1.

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