3-year notes net 5b yuan

Aluminum Corp of China Ltd, the country's largest producer of the metal, has raised 5 billion yuan selling three-year notes. It was less than the maximum of 10 billion yuan it had planned.

The firm which is raising capital to bankroll an aggressive expansion domestically and potentially abroad, said in April that it wanted to raise 3 billion to 10 billion yuan selling "medium-term bonds".

The notes carry an annual coupon of 5.3 percent, the company said in a statement. Bank of Communications Co Ltd was the lead underwriter for the issue.

HK dollar consolidates

The Hong Kong dollar was trapped in a narrow range on Tuesday, consolidating after it hit a 4.5-month low against the US dollar last week.

The local currency was trading at 7.8105/09 per dollar at 0855 GMT, little changed from late Friday trade in Asia, after shuffling between 7.8092 and 7.8110.

It touched a low of 7.8115 on Friday, its weakest level since Jan 22, Reuters data shows.

Hong Kong financial markets were closed on Monday for a public holiday.

The Hong Kong currency is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85.

Hong Kong interbank rates rose on Tuesday, tracking movements in the US dollar rates, dealers said.

City forex reserves at $159b

Hong Kong's official foreign currency reserve assets stood at $159 billion at end-May, the Hong Kong Monetary Authority said on Tuesday, down 0.56 percent from $159.9 billion at the end of April.

Hong Kong, whose currency is linked to the US dollar, ranks as the world's ninth largest holder of foreign currency reserves.

Inflation to sustain

A Hong Kong government economist said on Tuesday that the 2008 inflation may exceed the city's official forecast, but the government is maintaining its forecast for the time being.

"Our forecast for the inflation rate still remains unchanged," government economist K C Kwok told lawmakers at a panel meeting.

"We know that in the short term there is still pressure for the inflation rate to go up further, and the annual inflation rate may exceed our present forecast, given the drastic volatility in the commodity market and the foreign exchange market, so given such uncertainties, we are not going to change our forecast for the year," Kwok added.

The government has forecast an underlying inflation of 4.5 percent for this year.

Reuters

(HK Edition 06/11/2008 page2)