What's news

Arc, Bonavista seen as Sinopec takeover targets

The need of China Petroleum & Chemical Corp, or Sinopec, for new oilfields is making companies such as Arc Resources Ltd and Bonavista Energy Corp takeover candidates, an industry report says.

Sinopec must buy assets to help its parent meet a target of more than doubling its overseas crude output by 2015, Mirae Asset Securities said. The calgary-based Arc Resources and Bonavista, along with Afren Plc of London, are all logical acquisition candidates for Sinopec, according to Sanford C Bernstein & Co.

The State-run Sinopec increased its reserves by only 4.5 percent during the past decade, even as China's oil consumption doubled, according to data compiled by Bloomberg. That left Sinopec's oil and gas reserves in December at a level representing 9.3 years of output, the second-smallest stockpile among the world's 10 largest integrated oil and gas producers, the data show.

Supply of Olympic pin badges for 2016 Games

Beijing Huajiang Culture Development Co Ltd has secured a contract to provide Olympic pin badges for the 2016 Olympic Games , with a partnership agreement signed in London over the weekend.

Beijing Huajiang, also known as Honav, has been awarded the license to become the official provider of pins for the Olympic and Paralympic Games by the Rio 2016 Olympic and Paralympic Games Organizing Committee.

Honav Chairman Jack Chen pledged that his company is embracing the opportunity to be part of the Rio de Janeiro 2016 Olympic and Paralympic Games.

"We are becoming an increasingly significant part of the Olympic community," he said.

UBS predicts gain for China stocks as Haitong sees loss

UBS AG says China's benchmark stock index, this year's worst performer in the largest emerging market, will increase as much as 20 percent by year-end, while Haitong Securities Co expects the market to keep tumbling as economic growth slows.

At least one more interest rate cut by Chinese policy makers in the third quarter would help the Shanghai Composite Index rebound from a 13 percent drop since early March, said Chen Li, UBS' head of China equity strategy, in an interview.

Chen Ruiming, an equity strategist at Haitong Securities, China's second-biggest brokerage by market value, said he expects the Shanghai Composite to fall below 2,000 this year, or another 6 percent, as exports slump and government measures to curb property prices harm the industry.

"We are cautious about the market, and there won't be many investment opportunities this year," Haitong's Chen said.

Employees to have 30% of wages paid in shares

China plans to let workers have as much as 30 percent of their wages be paid as shares of their publicly traded employers, as regulators broaden measures to boost investor confidence in the stock market.

The stock used to pay employees must be acquired from the secondary market, according to a draft of rules posted on the China Securities Regulatory Commission's website on Sunday. Employees who receive shares as salaries or bonuses will have to hold them for at least 36 months.

The securities regulator has cut trading fees for stocks, expanded a trial for over-the-counter exchanges and allowed futures companies to start asset management businesses. China's stock market is the worst performing this year among the four largest emerging economies.

Coal price snaps 12 weeks of losses as miners cut output

The benchmark price for China's power-station coal snapped its longest streak of declines since at least 2008 as producers idled an estimated 300 million metric tons of capacity amid a slump in demand.

Spot coal with an energy value of 5,500 kilocalories per kilogram at the port of Qinhuangdao was unchanged at a range of 620 yuan ($97) to 635 yuan a ton as by Sunday compared with a week earlier, according to data on Monday from the China Coal Transport and Distribution Association.

Prices had fallen for 12 weeks since the beginning of May, the longest period of losses since Bloomberg started compiling the association's data at the beginning of 2008.

Slowing economic growth has eroded demand for fuel used to generate electricity, prompting miners to halt output rather than sell at a loss.

Tudou reports second quarter loss on rising costs

The online video company Tudou Holdings Ltd reported on Monday a net loss of 19.2 million yuan ($3.01 million) in the second quarter due to an increase in the cost of Internet bandwidth and content.

The NASDAQ-listed company's revenue stood at 171.9 million yuan in the second quarter, up 47.3 percent from a year ago, Tudou said.

Most of the revenue was generated through online advertisement sales, which jumped 47.4 percent to 150.7 million yuan.

The company's costs increased by 123.2 percent year-on-year to 191 million yuan in the second quarter.

Its Internet bandwidth costs totaled 65.1 million yuan, compared with 34.5 million yuan in the same period last year. Content costs hit 100.5 million yuan, up 64.8 million yuan year-on-year, and mobile video service costs rose to 12.3 million yuan, the company said.

Xiamen Airlines buys 40 Boeing 737s

China Southern Airlines Co Ltd said on Friday that its subsidiary Xiamen Airlines signed an agreement with Boeing Co to buy 40 737 aircraft.

The aircraft, which will cost $3.36 billion, will be delivered between 2016 and 2019, said China Southern Airlines, which has a 51 percent stake in Xiamen Airlines.

Xiamen Airlines, which uses only Boeing aircraft, will have a fleet of 121 aircraft after the order.

The new jets will increase China Southern Airlines' transport capability by 7.93 percent, compared with December 2011, it said.

PBOC will strengthen policy fine-tuning

China's central bank said on Sunday it will strengthen the fine-tuning of its monetary policy in the second half of this year, indicating as many analysts believe that more liquidity may be injected into the economy.

The monetary policy should play a countercyclical role in the national economy and credit policies will be improved to shore up the development of the real economy, the People's Bank of China said in a news release on its website.

It reiterated the significance of making the monetary policy more forward-looking, targeted and effective to support steady and relatively fast economic growth.

The statement came as analysts expect further cuts in interest rates and the reserve requirement ratio as China has recently seen weakening demand for its products and easing inflation.

Suntech Power 'was warned to watch out'

A major lender to China's Suntech Power Holdings, a solar panel maker that has been stung by a $690 million fraud linked to its expansion in Italy, financed the expansion despite warnings from a business ally to avoid Italy's scam-ridden solar sector.

US-listed Suntech, the world's largest supplier of solar panels, has lost 40 percent of its market value since revealing on July 30 that 560 million euros ($691 million) in bonds involved in securing the bank financing may never have existed.

Suntech has declined to discuss how the German government bonds in its possession turned out to be apparent forgeries and has hired lawyers to investigate one of the biggest suspected frauds to hit a listed Chinese company.

CNOOC signs $1.56b exploration deal

CNOOC Ltd, China's largest offshore oil producer, has signed a deal to spend 9.93 billion yuan ($1.56 billion) to explore for coalbed methane in China over the next five years as part of a 30-year agreement.

A deal on the project was signed between CNOOC Ltd and China United Coalbed Methane Corp Ltd, which is half owned by CNOOC Ltd's parent, China National Offshore Oil Corp, and half owned by China National Coal Group Corp, CNOOC said in a filing with the Hong Kong Stock Exchange.

The two companies aim to explore, develop and produce methane gas in China for 30 years, CNOOC said.

China is investing 100 billion yuan to double coalbed methane output by 2015. Beijing wants gas output from coal seams of up to 30 billion cubic meters by 2020, which would account for 15 percent of China's total gas production, up from 5 percent last year.

China Daily - Agencies

(China Daily 08/07/2012 page14)