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CNOOC parent gets OK to build LNG terminal

The China National Offshore Oil Corp won government approval to build another liquefied natural gas terminal in southern China's Shenzhen amid increasing demand for the fuel.

In June, the National Development and Reform Commission approved the project with a designed receiving capacity of 4 million metric tons a year, the commission said on its website on Monday. The Diefu facility, 70 percent owned by China National Offshore and the rest by Shenzhen Energy Corp, will comprise four LNG storage tanks each with 160,000 cubic meters of capacity.

China is planning to triple its use of gas by 2020 to about 10 percent of total consumption to cut reliance on coal and oil. LNG imports rose 29 percent in the first half of 2012 from a year earlier to 6.7 million tons, according to the General Administration of Customs.

Inter-bank bond market open to overseas investors

China allowed more international investors to buy bonds on the nation's largest debt market and purchase higher-yielding notes for the first time, as the world's second-biggest economy continues to develop its capital markets.

Participants in the Qualified Foreign Institutional Investor program now may buy bonds on the interbank market, the China Securities Regulatory Commission said in a Friday statement on its website. Previously, participants were restricted to exchange-listed debt, which is less than 2 percent of the interbank equivalent.

International investors will also now be permitted to buy bonds of small and medium-sized companies through private placements, the regulator said. Such securities typically yield more than their counterparts listed on China's stock exchanges.

China boosts railway-cost target for second time

China increased its planned 2012 spending on railway infrastructure for the second time this month as the government invests more to bolster its slowest economic growth in three years.

The Ministry of Railways, the nation's largest corporate debt issuer, plans to spend 470 billion yuan ($74 billion) on railroads and bridges this year, according to a bond prospectus on Monday. That's 4.8 percent higher than a ministry figure cited in a July 6 statement by the Anhui provincial economic planning agency, which indicated a 9 percent increase from the previous figure.

The new target exceeds last year's 461 billion yuan in spending and follows Premier Wen Jiabao's July 10 comments that promoting investment growth is essential to stabilizing an expansion that decelerated to 7.6 percent in the last quarter.

Iron ore seen extending decline in October

The slump in iron ore that's driven its price to its lowest level in 31 months may level off this quarter before deepening in October as business activity in China, the ore's biggest buyer, slows, according to UBS AG.

"October is the month I do get worried about because China does go on holiday for a week," said Tom Price, a Sydney-based analyst, referring to the National Day. "You see a potential for a correction in the iron ore trade around that month, just like we saw last year."

Iron ore, which has lost 16 percent in prices in 2012 as economic growth in China fell to its weakest pace in three years, tumbled 31 percent in October. Lower prices may hurt mining companies such as Vale SA, the world's largest iron ore producer, which said on Wednesday that second-quarter sales slumped 21 percent.

Chimbusco 'bought' Russian low-sulfur fuel oil

China Marine Bunker (PetroChina) Co Ltd bought an 8,000-metric-ton cargo of low-sulfur fuel oil from Russia, according to a company official who asked not to be identified because the information is confidential.

The country's largest marine-fuel supplier, known as Chimbusco, paid a premium of about $110 a ton over Singapore prices, and the shipment arrived at North China's Tianjin port in mid July, the official said.

COSCO drops to 9-month low on loss in first half

China COSCO Holdings Co Ltd, the country's largest listed shipping company, fell to a nine-month low on the Hong Kong Stock Exchange after saying its preliminary first-half loss widened more than 50 percent as a shipping glut weakened rates.

The fleet operator dropped by as much as 4.3 percent to HK$3.15 ($0.41) before trading at HK$3.17 as of the noon trading break, the lowest level since Oct 10.

Slowing global economic growth, including in China, and fuel costs that have remained high contributed to the record expansion of losses, the shipping company said in a statement on Friday after the market closed. Losses will widen by half from the 2.8 billion yuan ($439 million) deficit for the six months that ended June 30, according to the preliminary earnings report.

Gome bonds beat peers as put option nears

Gome Electrical Appliances Holdings Ltd may be leading a stock slide in China, but its convertible bonds are outperforming peers before a September redemption option that offers a 10 percent annualized yield.

Shares in the nation's second-biggest electronics retailer have tumbled 42 percent this month in Hong Kong, the steepest drop among 143 members of the MSCI China Index, as the company forecast a first-half loss.

The retailer announced in June a plan to buy back some of its convertibles and Philip Cheung, a finance manager at the Beijing-based company, said in a Thursday phone interview that there is "adequate cash" for these purchases as well as redemptions in September.

Gome had 5.5 billion yuan of funds at the end of March, according to its financial statement for the first quarter, a period in which earnings slumped 88 percent after China ended subsidies on new home appliances.

China opposes US tariffs on wind towers: statement

China strongly opposes the tariffs that the US Commerce Department has imposed on Chinese wind turbines, saying that decision backfires on the US wind power industry.

Chinese wind tower exporters did not dump, or sell the product at below-market rates, in the US market, nor did they receive non-actionable subsidies, in violation of WTO rules, said a statement from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products on Monday.

In a preliminary ruling on Thursday, the US Department of Commerce imposed provisional anti-dumping duties from 20.85 percent to 72.69 percent on utility-scale wind towers from China. The anti-dumping tariffs add to countervailing duties of between 13.74 percent to 26 percent, the department announced in May.

Some wind towers from China could thus face tariffs as high as nearly 100 percent.

Urban residents' incomes rising faster than inflation

The disposable incomes of most urban Chinese citizens grew faster than the consumer price index in the first half of the year, according to statistics from 28 provincial-level administrative regions.

Among the country's 34 provincial-level administrative regions, 28 have released data on the combined urban per capita disposable income in the January-June period, and all saw disposable income increase by at least 10 percent year-on-year, Beijing-based Beijing Times reported on Monday.

The same period witnessed a CPI increase of less than 5 percent in each of the 28 regions, said the newspaper.

A total of 17 provincial-level regions saw per capita income growth rates higher than or equal to the nationwide average of 13.3 percent, and Northwestern China's Ningxia Hui autonomous region is vying for the quickest growth, at 14.4 percent.

China's software industry slows in first half

China's software industry grew at a slower pace in the first half of the year amid the economic slowdown both at home and abroad, the Ministry of Industry and Information Technology said.

The sector's combined profits totaled 117 billion yuan ($18 billion) in the first half, up 10.6 percent from a year earlier, but the pace of growth slowed from the same period last year, the ministry said.

Business revenue climbed 26.2 percent year-on-year to 1.1 trillion yuan in the January-June period, down 3.1 percentage points from the growth in the same period last year.

In the first six months, the sector's exports rose 11.7 percent to $16.24 billion, 6 percentage points lower from the same period last year.

Guild Investment to add to value of Chinese stocks

Guild Investment Management Inc, which oversees about $150 million in assets, plans to buy more Chinese stocks in the next six months because of valuations.

"In the second half of 2012, it's a real opportunity for China and the rest of Asia markets, and we will be increasing our exposure," said Anthony Danaher, company president, in an interview at Bloomberg's office in Singapore.

The fund increased Chinese equities to 20 percent of total allocations from zero two months ago, said Danaher, who favors retail and travel-related Chinese stocks. The fund manager is avoiding auto and real estate shares.

Agencies - China Daily

(China Daily 07/31/2012 page14)