China Day Ahead: Goldman Sachs Traders Hire Executive; IRC Fills IPO Book
A cadre of Goldman Sachs Group Inc. traders in Asia preparing to start their own hedge fund hired Roger Denby-Jones, a former prime broker at the investment bank, as their firm’s chief operating officer, four people with knowledge of the matter said.
Denby-Jones, 46, will become COO of the new Hong Kong-based hedge-fund firm to be led by Morgan Sze, global head of Goldman Sachs’s principal strategies business, said the people, who declined to be identified because the talks are private. He will help to set up the company, though he won’t be a Goldman Sachs employee, they added.
Banks including Goldman Sachs and JPMorgan Chase & Co. are complying with the Dodd-Frank financial-overhaul act in the U.S. that prohibits them from risking capital by betting for their own accounts. Goldman Sachs, which makes about 10 percent of its revenue from proprietary trading, decided to disband the principal-strategies business, two people with knowledge of the decision said last month.
IRC Gets IPO Orders
The iron-ore unit of Russia’s third-largest gold producer cut the offer price to HK$1.80 a share from a range of HK$2.20 to HK$3 and now has the entire book of 1.04 billion shares covered at the reduced price, said one of the people, who declined to be identified because the information isn’t public.
The bookrunners for the IPO, Bank of America Corp., UBS AG and Bank of China International Holdings Ltd., will stop taking orders at 5 p.m. in Hong Kong on Oct. 15, the person said.
Communist Party Plenum
China’s Communist Party elite gather in Beijing tomorrow in the wake of a public challenge from retired officials who accuse some leaders of censoring calls by Premier Wen Jiabao for greater political openness.
The 200-odd Central Committee members are set to discuss personnel changes and a new five-year economic plan that starts in 2011. Vice President Xi Jinping may take a position on the party’s military commission, paving the way for him to replace General Secretary and President Hu Jintao, who steps down in late 2012, political analysts say.
In the run-up to the plenum, Wen has called for a relaxation of state control of social and political affairs. At last year’s session, Hu advocated more “intra-party democracy,” to give lower-level officials a greater hand in appointments and policymaking.
U.S. stocks rose, sending benchmark indexes to five-month highs, as better-than-estimated results at CSX Corp. and China’s record currency reserves boosted optimism in the economic recovery.
CSX, the second-largest publicly traded U.S. railroad, rallied 4.7 percent after also saying it’s seeing improvements across almost all markets. Alcoa Inc. added 1.6 percent and Freeport-McMoRan Copper & Gold Inc. advanced 4.5 percent, leading a measure of raw- materials producers to the biggest gain among 10 industries in the Standard & Poor’s 500 Index, amid speculation that Chinese demand will improve after the world’s fastest-growing major economy announced $2.65 trillion in currency reserves.
The S&P 500 rose 1 percent to 1,181.41 at 2:58 p.m. in New York. The Dow Jones Industrial Average increased 112.47 points, or 1 percent, to 11,132.87.
THE FOLLOWING STOCKS MAY BE ACTIVE TODAY:
Coal stocks: Weekly coal prices at Qinhuangdao port, a benchmark in China, rose 1.4 percent to between 725 yuan ($108.79) and 735 yuan a metric ton as of yesterday, compared with Sept. 29, according to data from the China Coal Transportation and Distribution Association.
China Shenhua Energy Co. (601088 CH), the nation’s largest coal producer, dropped 2 percent to 27.52 yuan. China Coal Energy Co. (601898 CH), the second-biggest, lost 1.6 percent to 11.77 yuan.
Anhui Jianghuai Automobile Co. (600418 CH): The chassis- maker said nine-month net income may have increased more than 220 percent on rising sales. The stock gained 4.5 percent to 12.21 yuan.
Anhui Shanying Paper Industry Co. (600567 CH): The boxmaker said nine-month net income may surge more than 300 percent. The stock gained 0.9 percent to 5.80 yuan.
Bank of Nanjing Co. (601009 CH): The lender, part-owned by BNP Paribas SA, won final regulatory approval for a plan to raise as much as 5 billion yuan ($750.3 million) to replenish capital. The stock rose 5.2 percent to 11.90 yuan.
China Citic Bank Corp. (601998 CH): The banking unit of the nation’s largest investment company said its planned rights offer was approved by the Ministry of Finance. The shares advanced 3.7 percent to 5.63 yuan.
China High Precision Automation Group Ltd. (591 HK): The industrial equipment maker said it expects to complete its actuator plant this year, starting production about June 2011 and reaching full capacity in about two years. Full-year net income rose to 227.7 million yuan from 200 million yuan a year earlier. The stock was unchanged at HK$5.10.
E-Kong Group Ltd. (524 HK): The telecommunications services provider said it will form a venture with Associated Network Partners Inc. to provide business and wholesale service in the U.S. The stock has been suspended since Sept. 30.
FAW Car Co. (000800 CH): The company that makes passenger cars in China with Volkswagen AG said profit for the first nine months probably rose between 67 percent and 100 percent from a year earlier to as much as 1.8 billion yuan. The stock added 5.1 percent to 21.85 yuan.
Hainan Haiyao Co. (000566 CH): The drugmaker said it may have a loss of 7.5 million yuan due to the floods in China’s southern province of Hainan. The stock fell 0.1 percent to 20.28 yuan.
Huaxia Bank Co. (600015 CH): The company said its nine- month net income may increase more than 50 percent. The shares rose 3.9 percent to 11.88 yuan.
China Huiyuan Juice Group Ltd. (1886 HK): The beverage producer said it received a waiver for its breach of portions of the financial covenant for a $250 million loan. The stock gained 0.4 percent to HK$5.56.
Hybrid Kinetic Group Ltd. (1188 HK): The automaker said it terminated an entrustment agreement that would have given it control of a stake in Yantai Xinchao Industry Co. because the deal would have required Chinese regulatory approval. The stock gained 5.6 percent to 28 Hong Kong cents.
Mongolian Mining Corp. (975 HK): The nation’s biggest coking coal exporter said controlling stockholder MCS Mining Group Ltd. pledged 359.7 million of its 1.52 billion shares in the company to Standard Bank Asia Ltd. as security for a loan. The stock gained 4.7 percent to HK$7.35 in its debut.
Seamless Green China Holdings Ltd. (8150 HK): The maker of artificial watch crystals, suspended since Oct. 29, 2009, will resume trading in Hong Kong.
Shandong Nanshan Aluminum Co. (600219 CH): The company said it will invest 2.96 billion yuan in an aluminum-sheet project. The shares declined 1.7 percent to 10.96 yuan.
Shanxi Taigang Stainless Steel Co. (000825 CH): China’s biggest stainless steel producer said third-quarter profit may have fallen between 73 percent and 76 percent from a year earlier. The stock added 0.2 percent to 6.04 yuan.
Shenzhen Overseas Chinese Town Co. (000069 CH): The company said its profit in the first nine months may rise 50 percent to 80 percent to as much as 1.7 billion yuan. The stock jumped 5.7 percent to 14 yuan.
Sino Dragon New Energy Holdings Ltd. (395 HK): The maker of materials for electronics said it will raise a net HK$70.1 million for potential future investments through a placing of 221 million shares at 32.4 Hong Kong cents each. The stock fell 6 percent to 39.5 Hong Kong cents.
Solartech International Holdings Ltd. (1166 HK): The cable maker said one of its directors is in talks for the possible acquisition of rare-earth mines in Mongolia. The stock gained 29 percent to 4 Hong Kong cents.
Western Mining Co. (601168 CH): China’s fourth-largest maker of zinc concentrate said its shareholder Newmargin Mining Co. sold shares equal to 4.7 percent of Western’s public float between March 17, 2009, and Oct. 12 of this year. The stock added 3.7 percent to 16.69 yuan.
Wuliangye Yibin Co. (000858 CH): China’s second-biggest maker of white liquor by market value’s net income in the first nine months rose 47.7 percent from a year earlier to 3.4 billion yuan. The stock fell 3.2 percent to 33.15 yuan.
Zhejiang Qianjiang Biochemical Co. (600796 CH): The pesticide producer said nine-month net income may increase more than 50 percent from the same period last year. The stock fell 0.8 percent to 8.83 yuan.
EVENTS HAPPENING TODAY: 3:00 p.m. Chief Executive Donald Tsang question and answer at Legislative Council BLOOMBERG TELEVISION GUESTS SCHEDULED FOR TODAY: 8:40 Peter Churchouse, Portwood Capital, Chairman 10:10 Tina So, Visiongain Capital Ltd, Managing Director
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