China Day Ahead: U.S. Delays Yuan Report, Guangzhou Property Market Curbs

The U.S. Treasury Department said it will delay a report on international currencies, including China’s, citing progress in the acceleration of the yuan’s rise.

The report will be delayed until after meetings of the Group of 20 nations in the coming weeks, according to a statement from the Treasury on Oct. 15.

Treasury Secretary Timothy F. Geithner “recognized China’s actions since early September to accelerate the pace of currency appreciation, while noting it is important to sustain this course,” according to the statement.

Guangzhou Property Curbs

China’s southern city of Guangzhou limited new home purchases to one unit for each household, joining eight cities that have issued buying rules in an effort to curb property speculation in the country.

The city also banned home purchases from non-Guangzhou residents who haven’t lived in the city for a full year, the Guangzhou Land Resources and House Management Bureau said in a statement posted on its website.

“The government will firmly curb unreasonable home purchases demand and strictly limit speculation in property market,” the bureau said, adding that the new measures are aimed at “restraining the over-rapid growth of property prices.”

Clean-Energy Subsidy Probe

The U.S. agreed to investigate China’s aid to its clean- energy producers after the United Steelworkers union lodged a complaint saying the assistance violates global trade rules.

Accepting the petition may lead the Obama administration to file a protest at the World Trade Organization over subsidies that the union says are contrary to trade rules.

Rare Earth Deposits

China’s medium and heavy rare earths reserves may last 15 years to 20 years at the current rate of production, possibly requiring imports, the Ministry of Commerce said.

Domestic rare earths deposits dropped to 27 million metric tons by the end of 2009, or just 30 percent of the world’s total known reserves, from 43 million tons, or 43 percent of the world total, in 1996, Chao Ning, section chief of foreign trade at the ministry said at a Beijing conference.

China, controller of more than 90 percent of production of the materials used in cell phones and radar, cut its export quotas by 72 percent for the second half and reduced output, spurring a trade dispute with the U.S. The country may not be able to meet growing global demand as the government continues to curb output, Lynas Corp. said in March.

Fungs Buy Into Hello Kitty

Billionaire brothers Victor Fung and William Fung, the owners of Li & Fung Ltd., acquired 1.03 percent of Japan’s Sanrio Co., owner of the Hello Kitty brand.

Li & Fung’s parent and Sanrio are seeking to develop products for the global market and cut logistics costs, Sanrio said in a statement. Katherine Wang of GolinHarris, the public relations agency hired by Li & Fung, said the brothers invested through closely held Fung Investment Pte. Ltd.

Kazakhstan’s Satimola IPO

Satimola Ltd., a closely held Kazakh potash exploration company backed by Citadel LLC, is studying a $100 million initial public offering in Hong Kong or London next year to take advantage of rising demand and prices for the crop nutrient.

The company is talks with banks on the IPO and hopes to appoint advisers within six weeks, before a possible listing in the second quarter of 2011, Chief Executive Officer Jaime Troncoso said by telephone from Almaty, Kazakhstan.

IMF Shanghai Meeting

Central bankers and other officials will meet at a previously scheduled conference in Shanghai on Oct. 18, the International Monetary Fund said Oct. 15.

The IMF said in a statement in Washington that it will sponsor the conference with representatives from Asia, Africa, Europe, North America and South America.

Chip Plant

Texas Instruments Inc., the second-largest U.S. chipmaker, bought a plant in China and will begin making semiconductors in the country for the first time as it adds overseas capacity to increase market share.

The company bought a 200-millimeter wafer facility from Cension Semiconductor Manufacturing Corp. in the southwestern Chinese city of Chengdu and will use it to make analog chips, Texas Instruments Senior Vice President Gregg Lowe said in a telephone interview. Texas Instruments didn’t disclose how much it paid for the factory, which was operated by Semiconductor Manufacturing International Corp.

U.S. Steel Pipe Ruling

Makers of steel pipes used in oil refineries and chemical plants are being harmed by imports from China, the U.S. International Trade Commission ruled, a decision that will mean duties on $182 million of products.

The decision is the last of four that producers such as U.S. Steel Corp. and the U.S. subsidiary of France’s Vallourec SA, the world’s second-largest maker of steel tubes for oil and gas production, needed to win in order to get dumping and countervailing duties imposed on Chinese exporters.

THE FOLLOWING STOCKS MAY BE ACTIVE TODAY:

Changjiang Securities Co. (000783 CH): The brokerage said net income for the first three quarters rose 2.5 percent from a year earlier. The stock jumped by the 10 percent daily limit to 13.52 yuan.

China Merchants Securities Co. (600999 CH): The brokerage said that nine-month profit was 1.88 billion yuan ($283 million), including 174.4 million yuan for September. The figures were unaudited and for the parent company only. The shares gained 5.1 percent to 24.31 yuan.

First China Financial Network Holdings Ltd. (8123 HK): The brokerage will buy the 16th floor of an office building in Hong Kong’s Central district for its own use for HK$38.5 million. The stock fell 1.5 percent to 33.5 Hong Kong cents.

Fosun International Ltd. (656 HK): The investment company terminated a planned joint venture for an investment in Tianjin Iron & Steel Co. because circumstances have changed. The stock gained 0.5 percent to HK$6.10.

Goldin Properties Holdings Ltd. (283 HK): The developer said it will raise as much as HK$5.08 billion through a rights offer of three-year, 8 percent convertible bonds to strengthen its financial position. The stock fell 0.2 percent to HK$4.68.

Jizhong Energy Resources Co. (000937 CH): The coal producer said profit for the third quarter probably rose between 200 percent and 250 percent from a year ago. The stock added 1.9 percent to 35.64 yuan.

M Dream Inworld Ltd. (8100 HK): The e-commerce services company said it plans to raise HK$104.9 million in a rights offer of four new shares at 10 Hong Kong cents each for every share held to finance the possible purchase of an information technology company. The stock was unchanged at 12.3 Hong Kong cents.

Mayer Holdings Ltd. (1116 HK): The steel sheet and pipe maker said it signed a preliminary agreement to buy a stake in a port-and-related-infrastructure project in Vietnam. The stock gained 4.1 percent to 77 Hong Kong cents.

Richfield Group Holdings Ltd. (8136 HK): The bagmaker said it applied to transfer the listing of its shares to the Hong Kong stock exchange’s main board from the Growth Enterprise Market. The stock was unchanged at 99 Hong Kong cents.

Tian An China Investments Co. (28 HK): The developer said it agreed to buy 11 as-yet uncompleted villas in Shanghai’s Changning district for 458.3 million yuan. The stock fell 2.3 percent to HK$6.03.

Wuhan Iron & Steel Co. (600005 CH): The steelmaker said it would cut the size of a rights offer to a maximum of 10.7 billion yuan from 12 billion yuan after excluding one of three planned projects to receive the funds. The stock rose 3.5 percent to 5.27 yuan.

Zhuguang Holdings Group Co. (1176 HK): The real estate investment company said it agreed to buy 11 floors of the Royal Mediterranean Hotel in Guangzhou for HK$630 million in cash and new shares. The stock will resume trading today.

Zijin Mining Group Co. (601899 CH): The company said two subsidiaries face legal claims for at least 19.5 million yuan in connection with a fatal dam collapse at a mine. A Guangdong court has notified the units that they’re being sued by the Xinyi city government. The shares climbed 0.7 percent to 10.27 yuan.


EVENTS HAPPENING TODAY:

-International Monetary Fund conference in Shanghai.
-Communist Party plenum closes in Beijing.

BLOOMBERG TELEVISION GUESTS SCHEDULED FOR TODAY:

8:10   Jim McDonald, Northern Trust, Chief Investment
       Strategist
9:40   Paul Wuh, Samsung Securities, Head of Internet
       Research/Analyst
12:10  Tim Bredbury, Former Liverpool Player

To contact the editor responsible for this story: Bruce Grant at bruceg@bloomberg.net.

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