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Hong Kong shares seen weaker, profit warnings in focus
July 16, 2012 / 1:13 AM / 5 years ago

Hong Kong shares seen weaker, profit warnings in focus

HONG KONG, July 16 (Reuters) - Hong Kong shares could start the week lower on Monday, with a series of profit warnings from Chinese companies overshadowing the relief from China GDP figures that came in largely in line with expectations.

Among those who posted profit warnings were ZTE Corp , China’s second-largest telecoms equipment maker, and China Eastern Airlines , one of China’s top three carriers.

China Premier Wen Jiabao’s comments on Sunday that Beijing will beef up steps in the second half of 2012 to boost policy effectiveness and foresight could also bolster hopes of more policy easing.

On Friday, the Hang Seng Index closed up 0.4 percent on the day at 19,092.6 points, but lost 3.6 percent for the week on worries that China’s slowdown would add more pressure on the sputtering global economy.

Elsewhere in Asia, Japanese markets are closed for a public holiday, while South Korea’s KOSPI was down 0.1 percent at 0045 GMT.


* A wide range of suitors, from the son of Asia’s richest man and a former rugby player in New Zealand to more established firms including AIA Group and Manulife Financial Corp , are expected to submit binding bids on Monday for ING Groep’s Asia insurance business in a deal that could top $7 billion.

* Lenovo Group Ltd is on track to overtake Hewlett-Packard Co as the world’s biggest PC maker by sales as soon as this year, making it the first Chinese company to grab the top spot globally in a technology sector.

* Agricultural Bank of China , China’s third-largest bank by market value, said its vice president Yang Kun has resigned with effect from Friday. Yang, who was recently investigated by the Communist Party’s disciplinary authorities, has also given up his posts as executive director and member of the board, the bank said in a statement late on Friday.

* ZTE Corp , China’s second-largest telecoms equipment maker, warned its first-half profit could drop as much as 80 percent due to lower gross margins, foreign currency exchange losses and domestic operator networks postponing their tenders. The profit warning comes as a report emerged that the FBI has opened a criminal investigation into the Shenzhen-based company over the sale of banned U.S. computer equipment to Iran and its alleged attempts to cover it up and obstruct a Department of Commerce probe.

* Thomas and Raymond Kwok, the billionaire co-chairmen of Sun Hung Kai Properties, and Rafael Hui, Hong Kong’s former No.2 public official, were charged on Friday in a bribery investigation surrounding Asia’s largest developer.

* PetroChina Co Ltd will bring a new 800,000-tonne-per-year (tpy) ethylene unit on stream at its Fushun refinery in October, bringing total ethylene capacity at the refinery to 1.0 million tpy, industry sources said on Friday.

* China Eastern Airlines , one of China’s top three carriers, issued a profit warning on Friday, estimating its first half net profit to have fallen by more than 50 percent.

* Vodafone confirmed on Friday it had agreed to share network infrastructure in Ireland with Hutchison Whampoa’s 3, marking the first such deal in the country.

* Russia’s Rusal, the world’s largest aluminium producer, denied on Friday it plans to shut down a bauxite and alumina plant in Jamaica.

* TCL Communication Technology Holdings Ltd expected to record a significantly lower profit for the three months and six months ended in June compared with the same periods a year ago due to decreases in profit margins and selling prices of its smartphones. It said profit for the second quarter is expected to be higher than the first quarter but it expected to see lower profit for the year ending in December in an unfavourable economic environment. For statement click here

* Sands China Ltd said the Macau government had approved an extension of a deadline for completion of the development of Parcel 3 in Cotai to April 17, 2016 from April 2013 and the company will be notified about the penalty amount due to the delay of the construction period. For statement clicks here

* BYD Co Ltd said it proposed a shareholders' return plan for the next three years of 2012-2014 to comply with Chinese regulator CSRC's requirement of enhancing transparency of dividend distribution and establishing a profit distribution system. For statement clicks here

* Polyester filament yarns maker Billion Industrial Holdings Ltd said its major shareholders Kingom Power and Winwett Investments have agreed to sell an aggregate 29 percent stake to state-owned China Energy Conservation and Environmental Protection Group for HK$2.9 billion. The shares will be sold at HK$4.39 apiece, or 4.3 percent premium to their previous close. Kingom and Winwett will continue to hold a 46 percent stake after the deal. For statement clicks here (Reporting by Clement Tan and Donny Kwok; Editing by Paul Tait)

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