Bank stocks in Shanghai increased over income reports, pushing the key index to a two-month high this morning.
The Shanghai Composite Index, which tracks yuan-denominated A shares and hard-currency B shares, added 1.43 percent, or 77.07 points, to 5,470.41 at 11:30am today. The index was at its highest since November 8.
Still, losers in the Shanghai market outnumbered winners 501 to 277 and 70 were unchanged.
The Shenzhen Composite Index, which covers the smaller mainland stock market, was up 0.43 percent, or 6.55 points, to 1,534.55.
China Merchants Bank Co led the gains among lenders after it said its net income for 2007 more than doubled from a year earlier.
Net profit rose 110 percent, the lender said in a statement yesterday, citing unaudited numbers. Profit in 2006 was 7.1 billion yuan (US$976million), or 0.48 yuan a share. The stock jumped 5.07 percent, or 0.98 yuan, to 41.05 yuan. The bank started trading at 10:30am after being suspended for one hour.
Industrial & Commercial Bank of China Ltd, the nation's biggest listed lender rose 2.38 percent, or 0.19 yuan, to 8.16 yuan.
In the industrial sector, China Petroleum & Chemical Corp, also known as Sinopec, surged 4.28 percent, or 1.01 yuan, to finish the session at 24.61 yuan.
Sinopec's Shengli field produced 27.7 million metric tons of crude oil in 2007 (554,000 barrels a day), the highest in nine years, Xinhua news agency reported, citing information from the company.
Shengli is China's second-largest oilfield behind PetroChina Co's Daqing.
Meanwhile, securities shares also increased this morning as Citic Securities Co, Asia's largest brokerage by market value, gained 5.55 percent, or 5.02 yuan, to 95.55 yuan.
The company said its net income "is expected to rise more than 400 percent,'' citing an unaudited preliminary assessment without giving detailed financial figures.
Citic Securities shares, trading at 28.7 times estimated earnings, soared 233 percent in 2007. The company, which earned 2.4 billion yuan in 2006, is scheduled to release audited results on March 20.
Airlines suffered a broad sell-off in the morning session as investors wait for the vote result of a stake deal between China Eastern Airlines Corp and Singapore Airlines Ltd.
The deal between China Eastern and Singapore Airlines and Temasek will likely be vetoed by shareholders at a shareholders meeting, according to an e-mailed statement from China Eastern this morning.
China Eastern Airlines Corp, bidding to sell a stake to Singapore Airlines Ltd., halted trading in Shanghai before shareholders vote on the deal at 2 pm today.
China National Aviation Holding Co, Air China's parent, holds about 10 percent of China Eastern's minority shares, and plans to vote against the deal and make a higher offer.
The Singapore deal needs approval from two-thirds of China Eastern's minority shareholders at a meeting in Shanghai. Trading in the shares will resume on January 9, the company said in a statement last night.
Singapore Air and parent Temasek Holdings Pte agreed to buy 24 percent of China Eastern for HK$7.16 billion (US$918 million) to gain a base in China, the world's second-largest aviation market.
But China National Aviation said on January 6 that it would make a counter-bid of at least HK$5 per share if the Singapore deal is rejected. China Eastern plans to sell new shares to its parent and the Singaporean investors at HK$3.80 apiece.
Air China, the world's biggest airline by market value, lost 0.93 percent, or 0.27 yuan, to close the session at 28.62 yuan.
(Shanghai Daily January 8, 2008)
