HKMA intervenes twice in dollar trading

Hong Kong's de facto central bank, the Hong Kong Monetary Authority, intervened twice yesterday, selling HK$1.55 billion (US$200 million) for US dollars in the afternoon as the local currency continued to hit the top of its trading band. Earlier in the day, the HKMA injected HK$5.038 billion into the market,its total injection for the day coming to HK$6.588 billion.

The Hong Kong dollar has been boosted by strong capital inflows, with investors pouring money into the city's asset markets as a weak US dollar makes them attractive and on optimism over China's economic growth. According to Reuters data, the latest intervention will lift the aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$224.366 billion by October 27.

Noble said to target 7% yield on sale of bonds

Noble Group Ltd, the Hong Kong- based supplier of raw materials, told investors yesterday it will price at least $500 million in 10-year bonds to yield about 7 percent, according to a person familiar with the sale.

Goldman Sachs Group Inc, HSBC Holdings Plc, JPMorgan Chase & Co and Royal Bank of Scotland Group Plc are managing the sale, said the person, who declined to be identified because terms aren't finalized.

West China to list on Hong Kong Stock Exchange

West China Cement Ltd said it was preparing to list its shares on the Hong Kong Stock Exchange (HKSE) and had entered into a $50 million bridging loan facility yesterday. The company, which aims to be listed on the HKSE before June 30, 2010, said it would also consider whether it was appropriate to retain a listing in London. The company, whose shares soared to a two-year high of 490 pence earlier in the day, also said it had amended its warrant instrument entered into with Credit Suisse in 2008 in preparation for the proposed listing. Under the amendment, West China will redeem all of the 7.8 million warrants and take a related charge of $21.1 million in the second half of 2009 and a total charge of $30.2 million for the financial year. West China said the bridge loan will be used to finance the redemption of warrants and for general working capital purposes. The company said the loan, secured by a charge over 19.4 million shares, or a 29.9 percent stake, held by Chief Executive Jimin Zhang, was due for repayment nine months from the date of the utilisation or immediately upon its listing on the HKSE, whichever is earlier.

Stocks drop as Beijing may tighten policy

Hong Kong stocks fell for a second day yesterday after China said its economy expanded at the fastest pace in a year, sparking concern it will tighten monetary policy to slow gains in asset values.

The Hang Seng Index dropped 0.5 percent to close at 22,210.52. The gauge has surged 96 percent from a low for the year on March 9 as stimulus measures revived economies around the world. Shares on the gauge are priced at an average 17.8 times estimated profit, up from 10.6 times at the start of 2009, according to data compiled by Bloomberg.

The Hang Seng China Enterprises Index, which tracks so-called H-shares of mainland companies, fell 0.3 percent to 12,959.93.

Hang Lung Properties Ltd, a Hong Kong-based developer which also invests on the mainland, retreated 0.8 percent. Esprit Holdings Ltd, the biggest Hong Kong-traded clothier, slid 2.6 percent, after saying first-quarter sales dropped. Datang International Power Generation Co, China's second-biggest electricity producer, dropped 2.6 percent after posting profit that was worse than analysts' estimates.

China Daily/Agencies

(HK Edition 10/23/2009 page3)