China Day Ahead: Goldman Sachs Shutdown; Xinjiang Goldwind's Hong Kong IPO

Goldman Sachs Group Inc. is shutting its principal-strategies business, a group that makes bets with the firm’s own capital, to comply with new U.S. rules aimed at curbing risk, two people with knowledge of the decision said.

Wall Street’s most profitable investment bank plans to hold off on announcing the wind-down while the 65 to 70 members of the global unit seek new jobs, the people said, speaking anonymously because the internal discussions about the process are confidential. Some traders and support staff may get roles within the firm, while a team in Asia may raise money for a new hedge fund, the people said.

Earlier plans for most members of the Principal Strategies group, led by Hong Kong-based Morgan Sze, to leave together and form a hedge fund were shelved, people with knowledge of the matter said. Now Sze, 44, may set up a fund with a smaller team focused on Asia, they said. Employees in London and New York are considering different options, the people said. The team’s members in New York, led by Bob Howard, are in talks to join another asset-management firm, according to two people.

Xinjiang Goldwind IPO

Xinjiang Goldwind Science & Technology Co. is seeking to raise about $800 million by reviving a Hong Kong share offering that was postponed in June, according to three people familiar with the transaction.

Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Beijing-based China International Capital Corp. are managing the deal, said the people, who declined to be identified because the information is confidential. The Chinese wind-turbine maker postponed previous plans to raise as much as HK$9.09 billion ($1.2 billion), citing market conditions.

Separately, Goldwind said it will invest 200 million yuan ($29.4 million) to build a wind-turbine manufacturing plant in the Xinjiang Autonomous Region in the northwest of China.

Capesize Bookings

Bookings of capesize vessels to haul dry-bulk commodities to China jumped 29 percent last month, according to Clarkson Plc, the world’s biggest shipbroker.

Producers and traders hired 67 of the ships in August for deliveries to the Asian nation, data from Clarkson Research Services Ltd. in London show. That was up from 52 in August. Iron ore makes up about 75 percent of capesize cargoes, according to ICAP Shipping International Ltd.

Hong Kong Bank Rules

Hong Kong banks need the express consent of customers before transferring personal data to third-parties for purposes not directly related to the original reason for collection, the Hong Kong Monetary Authority said.

Discussing the dismissal of Wing Lung Bank Ltd.’s administrative appeal against an enforcement notice by the Privacy Commissioner for Personal Data on the lender’s data use, the HKMA said in a letter that Hong Kong banks should clearly state the purpose for collecting personal data, and that “unconnected” third parties shouldn’t claim to be bank personnel when selling products.

Separately, the de facto central bank reminded authorized institutions that lending in yuan to individuals is forbidden, and they have to make reasonable efforts to ensure corporate clients aren’t borrowing to lend on to others.

Enterprise Revenue

Combined operating revenue for China’s 500 largest enterprises rose 6.3 percent last year, with the three top contributors coming from the energy industry, the People’s Daily said, citing an industrial rankings report.

Operating revenue rose to 27.6 trillion yuan ($4.1 trillion). Combined profits grew 25 percent to 1.5 trillion yuan last year, while combined assets increased 22 percent to 91.3 trillion yuan, the newspaper said, citing a report by the China Enterprise Confederation and China Enterprise Directors Association.

Huawei Handsets

Huawei Technologies Co., China’s largest phone-equipment maker, is betting Google Inc. branding and smartphones targeting the lower end of the market will build its sales in Europe.

Huawei’s unveiling of a 99 pound ($152) Google-branded smartphone will help the company grab market share in Europe, Tim Watkins, the company’s western Europe vice president, said in an interview in London. Huawei hasn’t yet named the operators who will first offer the Ideos phone, which carries a Google logo and doubles as a portable wireless Internet hotspot.

Congo Mines

Congo’s government gave the rights to two mines previously operated by First Quantum Ltd. to Fortune, a Hong Kong-based company, Mines Minister Martin Kabwelulu said.

Fortune is in a joint venture with Sodimico, a state-owned Congolese mining company, Kabwelulu said in a mobile-phone text message. He didn’t provide Fortune’s full company name.

MARKETS:

U.S. stocks rose on Sept. 3, with the Standard & Poor’s 500 Index gaining a fourth day and the Dow Jones Industrial Average erasing its loss for the year, as better-than-estimated growth in private payrolls eased concern the economy is sliding back into a recession.

JPMorgan Chase & Co., the second-biggest U.S. bank, gained 2.7 percent and Caterpillar Inc. advanced 2.3 percent as private employers climbed 67,000 last month. Monster Worldwide Inc., the online-recruiting company, increased 7 percent. H&R Block Inc. surged 5.8 percent after posting a narrower quarterly loss as the company seeks to win back from online rivals such as Intuit Inc.’s TurboTax. Financial stocks posted the biggest gains among 10 industries in the S&P 500.

The S&P 500 rose 1.3 percent to 1,104.51 at 4 p.m. in New York, extending its weekly gain to 3.8 percent and completing its longest winning streak since July. The Dow increased 127.83 points, or 1.2 percent, to 10,447.93, giving it a 0.2 percent gain for 2010.

THE FOLLOWING STOCKS MAY BE ACTIVE TODAY:

Hong Kong Property Developers: The city’s government will on Oct. 12 sell a residential building in the Kowloon section of the city adjacent to a lot sold at a record price last month. Sun Hung Kai Properties Ltd. (16 HK), the city’s biggest developer by market value, gained 0.5 percent to HK$111.70. Billionaire Li Ka-shing’s Cheung Kong (Holdings) Ltd. was unchanged at HK$99.45. Billionaire Lee Shau-kee’s Henderson Land Development Co. gained 1.1 percent to HK$47.65.

China Cosco Holdings Co. (1919 HK) The Chinese shipping company, sold 5 billion yuan of 10-year bonds at a coupon of 4.35 percent, according to a person with direct knowledge of the matter. The stock fell 0.4 percent to HK$8.40.

China Railway Construction Corp. (601186 CH): The building and engineering contractor has won 25 billion yuan worth of contracts, the equivalent to 7 percent of revenue in 2009. The stock fell 0.5 percent to 7.53 yuan.

Dongfeng Automobile Co. (600006 CH): The carmaker said August sales were 22,977 units compared with 18,193 units a year ago and eight-month sales rose 49 percent to 192,445 units. The stock gained 3.3 percent to 6.01 yuan.

China Minsheng Banking Corp. (600016 CH): The nation’s first privately owned lender received approval to open two rural banking units, in Chongqing. The stock fell 0.7 percent to 5.36 yuan.

China Vanke Co. (000002 CH): The real estate developer expects to obtain more land in the second half compared with the first half, Caijing Online reported, citing board secretary Tan Huajie. Vanke may buy stakes in other companies or set up joint ventures, the report said, citing Tan. The stock fell 0.8 percent to 8.50 yuan.

Zhongjin Gold Co. (600489 CH): The mining company said unit Yantai Xintai has discovered an additional 9.14 metric tons of natural gold resources bringing its total gold resources amount to about 13 tons. The stock fell 0.8 percent to 34.66 yuan.

BLOOMBERG TELEVISION GUESTS SCHEDULED FOR TODAY:

8:10 Patrick Bennett, Standard Bank, Chief Global Markets

Strategist

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