China Day Ahead: Mongolian Mining's Hong Kong IPO Approved, Baoshan Loss
Mongolian Mining Corp. received approval from the Hong Kong Stock Exchange for a $1 billion initial public offering, the first by a Mongolian company in the territory, according to two people familiar with the IPO.
Mongolian Mining, formerly known as Energy Resources, plans to list as much as 25 percent of its freely traded shares after the initial sale, said the people, who declined to be identified because the information is not yet public.
No companies based in Mongolia are currently listed in Hong Kong, according to data compiled by Bloomberg. The IPO would come after Moscow-based United Co. Rusal in January became the first Russian company to go public in the territory, where Ernst & Young LLP projects IPOs will reach a record.
Baoshan Loss
Baoshan Iron & Steel Co., China’s biggest publicly traded steelmaker, may post its first quarterly loss since the 2008 global financial crisis in the three-month period ending Sept. 30 as demand slows and high prices of raw materials erode margins.
Baoshan Steel may have a loss of 2.2 billion yuan ($323 million) to 2.9 billion yuan in the third quarter, according to figures derived from the company’s projected nine-month profit today. The last time the Shanghai-based mill posted a loss was for the October quarter of 2008.
Steel Prices
Benchmark Chinese steel prices fell 1.9 percent last week, the first decline in six, as the government studied a property tax and economic concerns eroded purchases of the material used in houses and cars.
Prices of hot-rolled coil fell to 4,176 yuan ($614) a metric ton on Aug. 27, from 4,259 yuan a ton a week ago, according to Beijing Antaike Information Development Co. Prices had increased for five straight weeks before this, posting an aggregate gain of 9.5 percent.
MARKETS:
U.S. stocks rose on Aug. 27, paring the market’s third straight weekly loss, as Federal Reserve Chairman Ben S. Bernanke vowed to safeguard the economic recovery and gross domestic product slowed less than estimated.
Alcoa Inc. and Exxon Mobil Corp. helped lead materials and energy producers to the top gains among 10 groups after Bernanke said the central bank will do “all that it can” to foster growth. Boeing Co., the world’s largest aerospace company, advanced 3.1 percent. 3Par Inc. jumped 24 percent after Hewlett- Packard Co. offered $30 a share for the company, topping Dell Inc’s $27-a-share proposal.
The Standard & Poor’s 500 Index gained 1.7 percent to 1,064.59 as of 4 p.m. in New York on Aug. 27. The Dow Jones Industrial Average advanced 164.84 points, or 1.7 percent, to 10,150.65. It ended the week down 0.6 percent.
STOCKS THAT MAY BE ACTIVE TODAY:
Agricultural Bank of China Ltd. (1288 HK): the lender, reporting its first earnings since completing the world’s biggest initial public offering, said first-half profit gained 40 percent climbed to 45.8 billion yuan ($6.74 billion)on loan growth and widening margin. The stock gained 0.3 percent to HK$3.54.
Bright Dairy & Food Co. (600597 CH): The milk-products producer’s first-half net income rose 35 percent to 61 million yuan. The stock fell 1.2 percent to 8.96 yuan.
China Resources Land Ltd. (1109 HK): The state-controlled property developer said first-half profit rose 169 percent to HK$3.5 billion ($445 million) after residential housing sales more than quadrupled even as curbs to rein in surging home prices were introduced. The stock rose 1.1 percent to HK$14.84.
China Shenhua Energy Co. (1088 HK): The unit of the nation’s biggest coal producer reported a 14 percent increase in first-half profit to 19.3 billion yuan on higher demand in the world’s fastest-growing major economy. The stock fell 0.8 percent to HK$28.20.
Citic Securities Co. (600030) China’s largest brokerage by market value, said first-half profit fell 31 percent to 2.63 billion yuan as a stock-market slump trimmed trading income and competition eroded commission revenue. The stock fell 0.5 percent to 11.77 yuan.
Dongfeng Motor Group Co. (489 HK): The Chinese partner of Nissan Motor Co., Honda Motor Co. and PSA Peugeot Citroen said first-half profit more than doubled to 6.53 billion yuan as economic growth spurred demand for cars. The stock gained 1.4 percent to HK$11.38.
Hainan Airlines Co. (600221 CH): The carrier said first- half profit rose 218 percent to 556.8 million yuan from a year earlier. The stock gained 0.5 percent to 5.86 yuan.
Lerado Group (Holding) Co. (1225 HK): The stroller maker’s first-half net income rose to HK$59.1 million from HK$34.9 million. The stock was unchanged at HK$1.10.
Sinotruk Hong Kong Ltd. (3808 HK): China’s biggest heavy- truck maker said first-half net income surged 77 percent to 839.6 million yuan as demand rose. Sinotruk will pay 325 million yuan for 80 percent of Chengdu Wangpai Automobile Group Ltd., a commercial-vehicle venture. The stock fell 0.8 percent to HK$7.54.
Vinda International Holdings Ltd.: (3331 HK): The tissue- products maker said first-half net income rose to HK$198.4 million from HK$180.2 million. The stock fell 3.3 percent to HK$8.11.
Xian Yuen Titanium Resources Holdings Ltd. (353 HK): The miner, rug trader and power producer lost control of its Qinghai and Inner Mongolia units and so will book a deconsolidation loss of HK$349 million and suspend its natural resources business. The stock, suspended on Aug. 27, will resume trading today.
COMPANIES SCHEDULED TO PUBLISH EARNINGS OR OTHER NEWS: COMPANIES SCHEDULED TO REPORT EARNINGS: WHARF HOLDINGS 4 HK CHINA MERCHANTS 144 HK FOXONN INTL 2038 HK MELCO INTL 200 HK SJM HOLDINGS 880 HK SUNING APPLIANCE 002024 CH TONGLING NONFERROUS 000630 CH CHINA RAILWAY CONSTRUCTION 601186 CH CHINA RAILWAY GROUP 601390 CH DAQIN RAILWAY 601006 CH YANGTZE POWER 600900 CH CHINA STATE CONSTRUCTION 601668 CH BLOOMBERG TELEVISION INTERVIEWS 12:10 Frederic Neumann, HSBC, managing director, co-head of Asian Economics Research (Senior Asian economist)
To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net.
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