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China Day Ahead: Expected August Trade Surplus; Taiwan Developing Missiles
China may tomorrow say that its trade surplus topped $20 billion for a third month in August in a report that risks stoking American lawmakers’ calls for protection from Chinese imports.
Exports probably exceeded imports by $26.9 billion, compared with $15.7 billion in the same month a year earlier, according to the median of 34 forecasts in a Bloomberg News survey. Shipments abroad gained 35 percent and imports grew 27.5 percent, according to the survey.
The U.S. House Ways and Means Committee will discuss next week China’s currency policy after Premier Wen Jiabao’s government limited the yuan’s gain to less than 1 percent versus the dollar since a June pledge for greater flexibility. With November elections looming, legislators may push a bill letting companies seek tariffs for compensation for an undervalued yuan.
Energy Subsidies
China has 461 energy service companies that are eligible to apply for a 2 billion yuan ($294 million) subsidy from the government, which aims to boost energy-efficiency nationwide.
The Ministry of Finance is providing the subsidy to the companies, known as ESCOs, to utilize energy-saving technologies in industries and buildings under energy-performance contracts, according to a statement on the National Development and Reform Commission website.
Taiwan Missiles
Taiwan is developing a missile capable of striking targets along China’s southeastern coast, according to a lawmaker with the island’s ruling Kuomintang party.
The weapon, developed under the “Ten Thousand Swords Project,” passed initial operating tests and evaluations in the first half of the year, Lin Yu-Fang said in an e-mailed statement. The missiles, developed after the U.S. refused to sell Taiwan the AGM-154 Joint Standoff Weapon, are able to paralyze airports in southeast China, Lin said.
Copper Import Expectations
Imports of copper to China, the biggest consumer of the metal, will be “relatively strong” in coming months because of low stocks, UBS AG said.
“Copper inventories in China are tight and this is one of the reasons for copper’s strong rebound in the past month,” UBS analyst Peter Hickson said in Moscow. “We would anticipate that copper imports will continue to be relatively strong in the next couple of months.”
USAID for Small Alternatives
The U.S. Agency for International Development is helping to arrange financing for small and medium alternative energy firms in China, an official said in an interview in Beijing.
The Private Financing Advisory Network, an agency supported by USAID that aims to nurture clean energy projects, has provided support to 22 clean energy projects from Chinese businesses and entrepreneurs since mid-2009, said Peter du Pont, the chief of party of USAID’s ECO-Asia Clean Development and Climate Program. Of these, five projects have raised a total of $14.3 million in financing.
MARKETS:
U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for the fifth time in six days, as concern eased that Europe’s sovereign debt crisis will derail the global economic recovery.
JPMorgan Chase & Co. and Bank of America Corp. gained at least 1.2 percent and European stocks rose on improved demand for Portuguese and Polish bonds. Goldman Sachs Group Inc. added 1.6 percent as KKR & Co. and Perella Weinberg Partners LP were said to be in talks to hire its U.S. proprietary trading group. Apple Inc. rallied 2 percent after UBS AG raised its profit and share-price estimates.
The S&P 500 rose 0.6 percent to 1,098.87 at 4 p.m. in New York. The Dow Jones Industrial Average climbed 46.32 points, or 0.5 percent, to 10,387.01.
THE FOLLOWING STOCKS MAY BE ACTIVE TODAY:
Coal producers: Benchmark coal prices at China’s Qinhuangdao port fell 1.4 percent to between 710 yuan and 720 yuan a metric ton as of yesterday compared with a week earlier, according to data from the China Coal Transport and Distribution Association.
China Shenhua Energy Co. (601088 CH), the nation’s largest coal producer, dropped 0.3 percent to 24.23 yuan. China Coal Energy Co. (601898 CH), the second-largest, fell 0.3 percent to 10.06 yuan.
Agile Property Holdings Ltd. (3383 HK): The real estate developer obtained a HK$1.59 billion ($205 million), three-year loan from banks led by Standard Chartered Plc on Sept. 8. The stock fell 2.4 percent to HK$9.38.
Changan Automobile Group Co. (000625 CH): The automaker is proposing to transfer its stake in its Chinese venture with PSA Peugeot to its listed unit, Chongqing Changan Automobile Co., after production starts. The stock rose 2.8 percent to 11.76 yuan.
China Grand Forestry Green Resources Group Ltd. (910 HK): The lumber company said it will place as many as 1 billion shares at 21 Hong Kong cents each, generating net proceeds of as much as HK$204.5 million for future investment. The stock gained 3.3 percent to 24.8 Hong Kong cents.
China Railway Group Ltd. (601390 CH): The railway builder won 33.5 billion yuan ($4.93 billion) worth of contracts and the value is equivalent to 10 percent of the company’s 2009 sales. The stock fell 0.9 percent to 4.41 yuan.
China Southern Airlines Co. (600029 CH): Asia’s largest carrier plans to sell up to 312.5 million shares to Nan Lung Holing Ltd., a unit of the parent. The stock was unchanged at 7.55 yuan.
North Asia Resources Holdings Ltd. (61 HK): The minerals exploration company will issue $33 million of three-year 8- percent convertible bonds to CCB International Asset Management Ltd. to help fund the purchase of an iron concession in Mongolia and possible future acquisitions. The stock fell 2.7 percent to HK$1.43.
Shanghai Pharmaceuticals Holding Co. (601607 CH): The company said its board approved a plan to list its shares in Hong Kong to raise funds for domestic and overseas acquisitions. The stock has been suspended since Sept. 7.
Tianjin FAW Xiali Automobile Co. (000927 CH): The carmaker said August sales fell to 14,546 units from 14,763 units a year earlier. Sales for the first eight months rose to 150,762 vehicles, compared with 140,655 units a year ago, it said. The stock added 0.7 percent to 9.25 yuan.
Taiyuan Coal Gasification Co. (000968 CH): The coal-to-gas producer said China’s regulator approved its plan to sell as much as 1 billion yuan of bonds. The stock fell 0.2 percent to 17.30 yuan.
Veeko International Holdings Ltd. (1173 HK): The women’s’ clothing maker sold 150 million new shares to funds at 26.8 Hong Kong cents each. Buyers of the shares include a Value Partners Group Ltd. (806 HK) fund, Senrigan Master Fund, Pacific Alliance Asia Opportunity Fund LP, Insight China Focus Fund and Ajia Partners Asset Management (HK) Ltd. The stock surged 34 percent to 43 Hong Kong cents.
Wharf (Holdings) Ltd. (4 HK): The Hong Kong-based real estate developer said it won land use rights for a site in Shanghai for 4.8 billion yuan, its second successful bid for a plot in the city in a week. Wharf plans to build high-end apartments on the 54,415 square-meter (585,718-square-foot) site. The stock fell 0.7 percent to HK$44.40.
EVENTS TODAY:
Hong Kong Express airlines introduces Airbus A330-200F aircraft, discusses sales.
China Life Insurance Co. Chairman Yang Chao and other executives will discuss the insurer’s sales strategy and the impact of accounting-rule changes.
The Chinese foreign ministry will hold a regularly scheduled press briefing.
BLOOMBERG TELEVISION GUESTS SCHEDULED FOR TODAY:
8:10 Colin Dyer, Jones Lang LaSalle, President & CEO 9:30 Goohoon Kwon, Goldman Sachs, Co-Head of Korea Research
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