Towngas plans syndicated loan

Hong Kong & China Gas Co Ltd (Towngas) plans to issue a HK$3 billion ($380 million) syndicated loan with a five-year financing, Basis Point reported Wednesday.

The Towngas deal is already sparking off aggressive price bidding from banks due to its rare name in the loan market, pushing all-in pricing to as low as 60 basis points, banking sources told Basis Point, a Thomson Reuters company.

Among the bidders are Bank of Tokyo-Mitsubishi UFJ, Citigroup, Mizuho Corporate Bank, Standard Chartered Bank and Sumitomo Mitsui, Basis Point said.

Residential rents rise 12%

Hong Kong's monthly residential rents climbed 12 percent to HK$44 per square foot so far this year from the end of 2009, CB Richard Ellis said in a press release Wednesday.

HKEx sees 'pretty good' IPO pipeline

Hong Kong Exchanges and Clearing Ltd (HKEx), the world's largest exchange operator by market value, has a good pipeline of initial public offerings in coming months, but 2011 IPO volume could fall short of this year's expected record, Chairman Ronald Arculli said Tuesday.

Hong Kong's stock exchange has been a top global market for IPOs, with $50 billion raised this year through the end of November. Most of the volume was from large deals that might be hard to come by next year, Arculli told Reuters in an interview. Some of the large deals this year included $20.5 billion for AIA Group Ltd and $22.1 billion for Agricultural Bank of China.

China Unicom cuts 3G fees

China United Network Communications Group Co, trailing in the nation's market for high-speed wireless customers, cut the minimum monthly fee for its third-generation service by more than half to attract more users.

Subscribers can now sign up for the 3G service for as low as 46 yuan ($6.9) a month, the Beijing-based company said in a statement on its website. The previous minimum fee was 96 yuan, Wen Baoqiu, a spokesman for Unicom, said by telephone Wednesday.

Cyclical stocks to outperform

Chinese companies that are dependent on economic growth may outperform the market next year as inflation will be "mild," valuations are "cheap" and the outlook for earnings is "solid," according to Morgan Stanley.

Investors should switch to so-called cyclical stocks, such as banks, developers, steelmakers and energy producers, analysts led by Jerry Lou wrote in a report Wednesday.

Hainan refinery to cut oil processing

China Petroleum & Chemical Corp's Hainan refinery will process 1.3 percent less oil in December compared with a month earlier, according to a plant official.

Oil processing volume will be 750,000 metric tons, or about 178,000 barrels a day, compared with 760,000 tons in November, said the official Wednesday, who declined to be identified because of company rules. A diesel shortage in China has eased after state refiners boosted production and increased imports, he said.

Sinopec, as Beijing-based China Petroleum is known, has been operating its refineries at full capacity for four months as the country battles with the shortage. The plant in southern China's Hainan Island has an annual capacity of 8 million metric tons. The refinery will export 30,000 tons of reformate to Singapore this month, the official said. Reformate is an unfinished form of gasoline that's aromatic-rich and high in octane.

Bloomberg - Reuters

(HK Edition 12/09/2010 page2)