Mainland markets rise on anticipated steel consolidation and the return of IPOs
Mainland markets advanced, led by steel stocks and brokerages. Hong Kong was dragged down by financial shares. The Shanghai Comprehensive Index advanced 1.18 percent to 3124.67. The SME Comprehensive Index slid 0.14 percent to 4393.23. The Hang Seng Index dropped 1.23 percent to 17979.41. The Hang Seng Growth Enterprises Index advanced 0.46 percent to 583.63. The Hang Seng China Enterprises Index declined 1.42 percent to 10827.62.
Taiwan's TAIEX Index slid 0.23 percent to 6649.91.
Bank of China (SH:601988; HK:3988), the nation’s largest foreign exchange bank, advanced 1.94 percent on Shanghai trading after announcing that it transacted the first ever cross-border Renminbi trade settlement deal today. The lender’s H-shares however dropped 2.43 percent.
Industrial and Commercial Bank of China (SH:601398; HK:1398), the world's largest bank, gained 1.28 percent on Shanghai but lost 1.69 percent on Hong Kong trading.
HSBC (HK:0005), Europe’s largest lender, retreated 1.09 percent.
China Cosco Holdings Co. (SH:601919; HK:1919), the world’s largest operator of dry-bulk ships, declined 1.20 percent on Hong Kong afer the Baltic Dry Index slumped 4.1 percent, the most since June 8. The company’s Shanghai-listed A-shares however rose 2.87 percent.
Xinjiang Goldwind Science & Technology Co. (SZ:002202), China’s biggest maker of wind turbines, advanced 0.19 percent. Workers will begin construction on the world's first 10 million-kw-level wind power station in mid-July in the far northwestern city of Jiuquan, Gansu Province, a local official said Sunday.
Brokerage shares advanced on the prospect of a large numbers of public offerings. The latest, Sichuan Expressway Co., said yesterday it received government approval to sell as many as 500 million shares in mainland China. Citic Securities(SH:600030), China’s biggest brokerage by market value, rose 6.83 percent. Haitong Securities Co. (SH:600837), the second-biggest, advanced 4.58 percent. Northeast Securities (SZ:000686) jumped 9.68 percent.
Steel shares surge on consolidation talk
Chinese Premier, Wen Jiabao, urged faster consolidation in the steel industry while visting a steelmaker today in Shangxi Province.
China’s steel makers surged today on expectation of mergers and acquisitions, even though the industry faces the risk of higher cash prices as annual contract talks stalled with iron-ore producers.
Liuzhou Iron and Steel Co. (SH:601003) surged to the 10 percent trading cap early in the morning on rumors that its will be acquired by Baoshan Iron and Steel Co. (SH:600019), China’s largest steel maker.
At close, steel shares advanced 7.38 percent on average. Ten shares surged to the 10 percent trading cap, including Laiwu Steel Co.（SH:600102）and Nanjing Iron & Steel Co. (SH:600282).
Baoshan surged 8.36 percent. Beijing Shougang Co. (SZ:000959) advanced 6.92 percent. Wuhan Iron and Steel Co. (SH:600005)climbed 8.05 percent.
Angang Steel Co.（SZ:000898;HK:0347）added 4.25 percent on Shenzhen trading and 1.24 percent on Hong Kong trading. Maanshan Iron and Steel Co.（SH:600808;HK:0323）gained 10 percent on Shanghai and 5.45 percent on Hong Kong. Chongqing Iron and Steel Co. (HK:1053) climbed 2.61 percent
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