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China Day Ahead: Agricultural Bank Freezes Loans, China Life Profit Gains
Agricultural Bank of China Ltd., the nation’s fourth largest by assets, froze lending to property developers for a week as it reviews outstanding loans to the industry, two people with knowledge of the matter said.
The bank issued the order to branches nationwide on Aug. 23 after its loans to developers jumped almost 28 percent in the first half, more than at local rivals, the people said, asking not to be identified as no announcement has been made. The ban will be lifted at the end of this month after Agricultural Bank completes the review, they said.
Chinese banks are tightening loans to the real estate industry after the government began a clampdown on property speculation in April.
China Life Earnings
China Life Insurance Co., the nation’s biggest insurer, said first-half profit rose 7.4 percent as premium income rebounded after a decline last year, when adjustments to its product mix slowed sales.
Net income climbed to 18 billion yuan ($2.7 billion), or 0.64 yuan a share, from a restated 16.8 billion yuan, or 0.59 yuan, a year earlier, the Beijing-based insurer said in a statement to the Hong Kong stock exchange today.
Shippers Profitable
China Cosco Holdings Co., Asia’s largest shipping line by market value, returned to profit in the first half as an economic rebound revived rates for hauling commodities and containers.
Net income of 3.45 billion yuan ($507 million) compared with a loss of 4.6 billion yuan a year earlier, under international accounting standards. China Shipping Container Lines Co. reported a 1.17 billion yuan profit, compared with a year-earlier net loss.
Air China Earnings
Air China Ltd., the world’s largest carrier by market value, boosted first-half profit 60 percent on surging travel demand and fuel-hedging gains.
Net income rose to 4.61 billion yuan ($679 million) from 2.88 billion yuan a year earlier, the company said late yesterday. Sales rose 51 percent to 34.8 billion yuan. Profit beat the 3.9 billion yuan average of four analyst estimates compiled by Bloomberg.
Jiangxi Copper Net
Jiangxi Copper Co., China’s biggest producer of the metal, said first-half profit surged 73 percent after output and prices of copper and gold increased.
Net income rose to 2.2 billion yuan from 1.27 billion yuan, a year earlier, the Guixi, Jiangxi province-based company said yesterday, citing international accounting standards. Belle Chan, a BOC International Holdings Ltd. analyst in Hong Kong, estimated earnings of 1.5 billion yuan.
Single Cable Company
China plans to create a single company to operate cable- television networks nationally as part of a drive to integrate the country’s telecommunications, Internet and broadcasting systems, an official said.
“The cable-television network at present is managed locally, and is lacking in organization and scale,” Tao Shiming, an official at the State Administration of Radio, Film and Television, told an industry conference in Beijing. A committee set up by the agency will seek approval from the State Council, China’s Cabinet, he said.
The proposed national operator will allow companies with sufficient scale to join, and accelerate the adoption of digitization technologies. China has more than 170 million cable TV subscribers, more than double the number in the U.S., according to consultancy Media Partners Asia.
Wen Wants Coal Mergers
Chinese Premier Wen Jiabao called for accelerated consolidation of the country’s coal-mining industry at a State Council work conference today, the central government said on its website today.
Wen also called for faster development of the river- shipping industry, the government said.
Household Data Defended
The China Reform Foundation’s report saying that real household incomes in China are much higher than in official figures is “unreliable,” Xinhua News Agency said, citing Shi Faqi, a National Bureau of Statistics official.
The report, written by Wang Xiaolu, has flaws, including the methods of choosing survey samples and making calculations, so Wang’s final result is higher than it should be, Xinhua said, citing Shi’s bylined article on the bureau’s website.
Taiwan China Leasing
Taiwan’s Financial Supervisory Commission said it is studying proposals to allow its financial services companies to invest in China’s financial leasing firms.
MARKETS:
U.S. stocks and oil advanced, erasing early declines, and Treasuries reversed gains amid speculation this month’s retreat in riskier assets has gone too far relative to prospects for the economic recovery.
The Standard & Poor’s 500 Index climbed 0.3 percent to 1,055.33 at 4 p.m. in New York, snapping a four-day losing streak and rebounding from a seven-week low. The decline in 10- year Treasuries pushed their yield up 4 basis points to 2.53 percent after they slid to a 19-month low earlier. Crude oil rose from an 11-week low as the dollar’s drop against the euro bolstered the appeal of commodities as an alternative investment.
The Stoxx Europe 600 Index fell 0.8 percent, adding to yesterday’s 1.7 percent slump. Tullow Oil Plc dropped 4.6 percent after warning of likely delays to its projects in Uganda. The MSCI Asia Pacific Index sank 1.6 percent to its lowest level in five weeks.
THE FOLLOWING SHARES MAY BE ACTIVE TODAY:
Coal producers: Chinese Premier Wen Jiabao called for accelerated consolidation of the country’s coal-mining industry at a State Council work conference yesterday.
China Shenhua Energy Co. (601088 CH), the largest coal producer, lost 2.9 percent to 23.79 yuan. China Coal Energy Co. (601898 CH), the second largest, fell 2.2 percent to 9.63 yuan.
Shipping Lines: The Baltic Dry Index, a measure of commodity shipping costs, snapped a 14-session rally as charter rates for delivering iron ore slumped.
China Cosco Holdings Co. (601919 CH), the largest operator of dry-bulk ships, fell 3.9 percent to 9.77 yuan. The company returned to profit in the first half. China Shipping Development Co. (600026 CH), the dry-bulk arm of the second-biggest shipping group, sank 4.2 percent to 9.42 yuan.
Agile Property Holdings Ltd. (3383 HK): The Chinese real estate developer will join KWG Property Holding Ltd. (1813 HK), Guangzhou R&F Properties Co. (2777 HK) and Shimao Property Holdings Ltd. (813 HK) in jointly developing a 7.05 billion yuan piece of land in Tianjin mainly with apartments. Agile fell 4.5 percent to HK$8.92, KWG fell 0.4 percent to HK$5.49, R&F fell 2.2 percent to HK$11.50 and Shimao dropped 6.6 percent to HK$12.56.
BOE Technology Group Co. (000725 CH): China’s biggest maker of liquid-crystal-display panels said it won regulatory approval for private placement of A shares. The stock added 1.3 percent to 3.02 yuan on Aug. 24 before trading was suspended.
GCL-Poly Energy Holdings Ltd. (3800 HK): The producer of materials for solar cells said first-half net income rose to HK$787.6 million from HK$399.95 million, or 4.02 cents. The stock fell 0.5 percent to HK$1.89.
Hengdeli Holdings Ltd.: The retail partner of Swatch AG in China will raise as much as HK$1.04 billion through the private sale of 300 million shares at HK$3.48 each to fund expansion of its sales and retail network, including possible acquisitions. The stock, suspended yesterday, gained 0.8 percent to HK$3.97 on Aug. 24. It will resume trading today.
Dongfang Electric Corp. (1072 HK): The maker of power- generating equipment said first-half net income rose to 1.02 billion yuan from 670.6 million yuan. The stock gained 0.7 percent to HK$27.30.
Fosun International Ltd. (656 HK): The Chinese investor in steel, real estate and drugs said first-half net income rose to 1.61 billion yuan from 1.32 billion yuan. The stock was unchanged at HK$6.11.
Hainan Meilan International Airport Co.: The airport operator said first-half net income rose to 133 million yuan, from 108.2 million yuan. The stock fell 3.6 percent to HK$8.10.
Haitong Securities Co. (600837 CH): China’s second-biggest brokerage by market value reported a 25 percent decline in first-half profit as competition squeezed commissions and investors traded fewer stocks. The stock retreated 2.7 percent to 9.67 yuan.
Industrial Bank Co. (601166 CH): The Chinese lender backed by HSBC Holdings Plc said first-half profit rose 41 percent on growing demand for loans and fee-based services. The stock slumped 4 percent to 25.64 yuan.
Intime Department Store Group Co. (1833 HK): The retailer said it purchased land in Wenling in China’s eastern province of Zhejiang at auction for 645.6 million yuan, and plans to build a shopping mall on the site. The stock fell 3.6 percent to HK$8.93.
Li Ning Co. (2331): The sporting goods maker owned by a Chinese Olympic medalist said first-half net income was 581.6 million yuan. The stock fell 1.1 percent to HK$25.95.
SAIC Motor Corp. (600104 CH): China’s largest domestic automaker said first-half profit gained fourfold after selling more cars with General Motors Co. and Volkswagen AG in the world’s biggest auto market. The stock decreased 2.6 percent to 15.61 yuan.
COMPANIES EXPECTED TO POST EARNINGS OR OTHER STATEMENTS:
ICBC 1398 HK PETROCHINA 857 HK BANK OF CHINA 3988 HK BOC HONG KONG 2388 HK HENDERSON LAND 12 HK CHINA RESOURCES 291 HK CHINA UNICOM 762 HK TCL COMM 2618 HK TCL MULTIMEDIA 1070 HK TPV TECHNOLOGY 903 HK CHINA OILFIELD 2883 HK XINAO GAS 2688 HK R&F PROPERTIES 2777 HK KERRY PPT 683 HK SANDS CHINA 1928 HK HUADIAN POWER 600027 CH HEBEI IRON & STEEL 000709 CH SHANGHAI AIRPORT 600009 CH BEIQI FOTON 600166 CH GUANGZHOU BAIYUN AIRPORT 600004 CH
BLOOMBERG TELEVISION GUESTS:
7:40 Tucker Grinnan, HSBC, Head of Regional Telecom Research
8:10 Teddy Tsai, DnB NOR, Equity, Head of Reserch
9:10 Khiem Do, Baring Asset Management, Head of Multi-Asset
Strategy
10:10 Jim Antos, Mizuho Securities Analyst
10:40 Philip Wei, China Airlines, Chairman
To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net.
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