China Day Ahead: SouFun Holdings Surges After IPO; Macau Casino Outlook

SouFun Holdings Ltd., the operator of China’s biggest property website, posted the second-largest first-day gain for a U.S. initial public offering this year after raising $125 million selling shares at the top of its price range.

The company that controls almost half of China’s online real-estate advertising market surged 73 percent, or $31, to $73.50 in New York Stock Exchange trading after selling 2.93 million American depositary receipts at $42.50. At the midpoint price, SouFun was valued at 14.3 times earnings, 14 percent less than the average of six Internet portals and property information providers, data compiled by Independent International Investment Research Plc and Bloomberg show.

The offering came after the number of Internet users in China, the world’s fastest growing major economy, surpassed the entire U.S. population. The IPO was the first of at least 11 scheduled in the U.S. this month after the Standard & Poor’s 500 Index rebounded 10 percent from its 2010 low in July.

Macau Casino Receipts

Macau’s gross casino receipts will rise 30 percent for the full year, slowing from 60 percent growth in the first eight months, Macau Post Daily reported, citing a forecast by Secretary for Economy and Finance Francis Tam.

Macau’s casino receipts rose 9.7 percent to 119.4 billion patacas in 2009, according to the newspaper.

Bank Capital Rules

China will publish an “overall framework and road map” for bank capital requirements at an “appropriate time” after discussing the matter with lenders, the China Banking Regulatory Commission said.

The CBRC will adjust capital requirements for China’s banks, including quantity, quality, timing and supervision methods, after the new Basel rules are set at year-end, the watchdog said in a statement on its website.

China Goes to Jersey

China, facing complaints in Congress that it discriminates against American competitors, sent more than 30 corporate executives to New Jersey to seek trade and investment deals with U.S. companies.

Huawei Technologies Co., China’s largest phone-equipment maker; ZTE Corp., the second-largest; and Yabao Pharmaceutical Group Co. were among companies whose executives are visiting Trenton today with Wang Chao, China’s vice minister of Commerce.

Energy Info Exchange

The U.S. and China are working on a memorandum of understanding on sharing energy data and are likely to reach an agreement soon, said Richard Newell, head of the statistics arm of the U.S. Energy Department.

The “very broad” accord would cover a spectrum of energy information including supply and consumption levels, Newell said in an interview this week at the World Energy Congress in Montreal. China overtook the U.S. earlier this year as the world’s biggest energy consumer.

Jinchuan Buys Continental

Jinchuan Group Ltd., a closely held Chinese nickel and copper producer, agreed to acquire Continental Minerals Corp. for C$432 million ($418 million) to gain a gold and copper project in Tibet.

Jinchuan, which controls 12 percent of Vancouver-based Continental, will pay C$2.60 for each of the 166 million shares it doesn’t already own, Continental said in a statement. The proposed deal values Continental at 13 percent more than its last closing price in Toronto. Continental also said it plans to pay investors as much as 10 cents a share in cash before the takeover is completed.

Iron Ore Transport

Demand to transport iron ore may rebound once China ends steel-production cuts and steel prices may gain in the next several months because of reduced supply, according to SSY Consultancy & Research Ltd., a unit of the world’s second-largest shipbroker.

Output cuts by China, the world’s largest steelmaker, will probably continue to the year’s end because of limited power supplies for mills, the nation’s Ministry of Industry and Information Technology said Sept. 15. The reductions are aimed at meeting energy-efficiency targets.

Lukoil Escapes Monopoly

OAO Lukoil, Russia’s oil and gas company with the most assets overseas, may dodge OAO Gazprom’s monopoly on Russian natural gas exports by supplying China the fuel it produces in central Asia.

Lukoil plans to sign a gas agreement with China National Petroleum Corp. during Russian President Dmitry Medvedev’s trip to China later this month, Lukoil Chief Executive Officer Vagit Alekperov told reporters in Sochi.

Venezuela Oil, Loan

Venezuela will increase oil shipments to China to 300,000 barrels a day by 2012 from 200,000 this year to repay a $20 billion loan for development projects, according to an accord published in the Official Gazette, the formal record of government actions.

Separately, China Development Bank sent the first $4 billion of a $20 billion loan, Venezuelan President Hugo Chavez said on state television.

Banks Snub Regulators

China’s financial regulators are failing in efforts to curb the nation’s banks from repackaging loans and bonds via special companies and selling the risk to individual investors, according to Fitch Ratings Ltd.

“Issuance is not down,” Charlene Chu, senior director of financial institutions, said in an interview in Beijing. Deals are even “bigger” and regulations give banks and the so-called trust companies “a lot of leeway to keep continuing,” she said.

Wheat Prices Rise

Wheat rose for the first time in four days on Sept. 17 as cold weather threatened crops in Canada, the world’s second-biggest exporter, and in China.

An overnight freeze damaged wheat, canola and barley in Alberta and Saskatchewan, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. In China, the cold may hurt corn in the biggest growing region, according to a National Grain & Oils Information Center website. That may boost demand for wheat for use in livestock feed.

THE FOLLOWING STOCKS MAY BE ACTIVE TODAY:

Cathay Pacific Airways Ltd. (293 HK): Hong Kong’s largest carrier sees “continued strength” in air-cargo demand, Chief Executive Officer Tony Tyler said in a Bloomberg TV interview. The carrier has hedged about 30 percent of its fuel needs for the next few months, he said. The stock gained 3.4 percent to HK$21.40.

Dongfeng Motor Group Co.: China’s auto sales may reach 30 million vehicles a year by 2020, Li Shaozhu, an executive director at the automaker, said at a conference in Chengdu, China. The stock gained 2.5 percent to HK$13.86.

K. Wah International Holdings Ltd. (173 HK): The Hong Kong-based property developer hired HSBC Holdings Plc and Mizuho Financial Group Inc. to help it borrow HK$535 million ($69 million), according to a person familiar with the matter. The stock gained 1.7 percent to HK$2.98.

Oriental Ginza Holdings Ltd. (996 HK): The developer said it has agreed to sell two mixed-used developments in Beijing and an apartment in Hong Kong for HK$1.2 billion, and re-invest the money in other parts of China with higher growth potential. The stock has been suspended since Sept. 9.

TPV Technology Ltd. (903 HK): AU Optronics Corp. said it and TPV will form a venture in Brazil to assemble and sell optoelectronics parts and products. TPV gained 3.9 percent to HK$4.80.

ZTE Corp. (000063 CH): The telecommunications-equipment maker said the European Union anti-dumping investigation of Chinese wireless wide area networking modems has “no major impact” on its business because its sales from those products are “relatively small” in total sales. The stock fell 0.2 percent to 28.02 yuan.

EVENTS SCHEDULED FOR TODAY:

Baoshan Iron & Steel Co. and SAIC Motor Corp. hold signing
ceremony on car-weight agreement. 5:30 p.m.
Shanghai Pudong Development Bank Co. shareholder meeting. 9:30
a.m.

BLOOMBERG TELEVISION GUESTS SCHEDULED FOR TODAY:

9:10      Todd Martin, Societe Generale, Asia Equity Strategist
10:50     Edwin Town, Clear the Air Vice-Chairman
12:10     Puru Saxena, Puru Saxena Wealth Managment CEO

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