Stocks gain on commodity speculation

Hong Kong stocks advanced for a second day after Tencent Holdings Ltd reported a surge in earnings, while resource-linked shares gained on speculation commodity prices will rise.

The Hang Seng Index advanced 1 percent to close at 20,422.46 in Hong Kong. The Hang Seng China Enterprises Index, which tracks the so-called H-shares of Hong Kong-listed mainland companies, gained 1.9 percent to close at 11,729.71.

Tencent, China's largest Internet company by market value, jumped 5 percent and was the biggest contributor to the gain in the Hang Seng Index. Air China Ltd, the nation's largest international carrier, rose 6.7 percent after Morgan Stanley raised its investment rating.

HK bourse to introduce faster trading system

Hong Kong Exchanges & Clearing Ltd, operator of Asia's third-biggest stock market, plans to speed up its trading system to keep up with rivals in Japan and Australia and capture increasing capital flows from China.

Chief Executive Officer Charles Li said at the Asia-Pacific Trading Summit in Hong Kong Thursday that the Hong Kong exchange will roll out a new trading system that can process 15,000 transactions per second by the end of 2011, according to Li. That compares with its current capacity of 3,000 transactions per second, Scott Sapp, a spokesman for the bourse said.

Swire hasn't decided on property IPO

Swire Pacific Ltd, which last week shelved the initial public offering of its property unit, said it hasn't decided whether it will proceed with the sale.

"We have yet to make the decision internally as to whether we will proceed and if so, when," company Chairman Christopher Pratt told reporters at a briefing Thursday.

"We've frankly yet to sit down, coolly appraise what we learned from the process," Pratt said. Cutting the price of the IPO "was not in the interest of shareholders."

Sateri to hire banks for IPO

Sateri International Group, a specialty cellulose maker controlled by Indonesian businessman Sukanto Tanoto and his family, has hired Credit Suisse Group AG and Morgan Stanley to manage a Hong Kong initial public offering, said three people with knowledge of the matter.

The Shanghai-based company may raise as much as $1 billion in the second half, said two of the people, who declined to be identified because the information is private.

Ke Tao, a Shanghai-based vice president in charge of strategy at Sateri, wasn't immediately available to comment. Credit Suisse spokesman Adam Harper declined to comment, as did Morgan Stanley's Nick Footitt.

Citic Pacific's outlook cut by S&P to 'BBB-'

Citic Pacific Ltd, an arm of China's biggest state-owned investment company, had its credit outlook cut by Standard & Poor's Ratings Services after costs for its $5.2 billion Australian iron ore project surged.

"The cost overrun will exert further pressure on Citic Pacific's already-weak credit metrics, particularly its highly leveraged capital," Standard & Poor's said Thursday in a statement. The agency downgraded Citic Pacific's outlook to negative from stable and re-affirmed its "BBB-" rating.

Citic Pacific Thursday reiterated the project is on schedule to start by the fourth quarter, two days after saying building costs jumped by $835 million.

Agencies - China Daily

(HK Edition 05/14/2010 page2)