BOCHK holds $69m LB bonds

BOC Hong Kong (BOCHK) said its total exposure to bonds issued by US bank Lehman Brothers (LB) was about $69.21 million as of yesterday.

Worries over banks' exposure to structured products issued by Lehman, which filed for bankruptcy protection on Monday, have hammered financial stocks around the world.

The bonds comprised $50 million senior unsecured bonds and a HK$150 million senior unsecured bond held by a 51 percent-owned subsidiary, BOC Group Life Assurance Co Ltd, it said in a statement. It will consider making appropriate provisions against the bonds under its accounting standards.

HSBC on top

HSBC shares held relatively steady amid the global banking crisis yesterday to take the title of the world's biggest bank by market capitalization from Industrial and Commercial Bank of China.

ICBC shares sank by the daily limit of 10 percent in Shanghai and by 9.9 percent in Hong Kong to reach a market value of about $168 billion as Chinese banks continued to tumble after the government cut the cost of bank loans on Monday for the first time since February 2002.

HSBC slipped 2.5 percent in Hong Kong and 0.7 percent in London by 1030 GMT, giving it a value of almost $180 billion.

HK dollar trades choppy

Trade in the Hong Kong dollar was choppy, with the currency falling in the morning but rebounding in late afternoon as carry trades evaporated.

The local currency fell to 7.7870 to the US dollar in early afternoon on arbitrage trade but once London opened it briefly rose above 7.78.

The market has been volatile in recent sessions, partly due to the financial market turmoil in the United States.

Local short-dated interbank interest rates edged higher in early trade but eased a little late in the day, tracking US dollar rates, amid global credit crunch.

Solargiga to boost capacity

Solargiga Energy Holdings Ltd, a major Chinese maker of silicon parts used in solar power generation, plans to increase its solar wafer capacity five-fold to 1 gigawatt by 2012 to help meet robust demand for clean energy.

China's No 2 maker of monocrystalline silicon wafers said it will enlarge on a previous blueprint, in which it planned to double production capacity of monocrystalline wafers to 400 megawatts next year.

Chief Executive Hsu You-yuan said on Wednesday his firm would raise the spending plan after securing a $455 million, 10-year polysilicon supply contract with fuel-cell parts maker Hoku Scientific Inc this month.

Zinc prices may rise

Merchants in China, the world's top zinc producer, expect prices of the metal to rise in coming months as domestic banks increase lending and provide more cash to end-users, despite large domestic supplies.

Prices of spot zinc have fallen about 13 percent since the beginning of July because of end-users' reduced cash, the closure of small steel mills around the time of the Olympics and expanded capacity at zinc smelters.

Reuters

(HK Edition 09/18/2008 page2)