Hong Kong Hang Seng ended 2.5% higher to 20,979.24, after the Chinese government announced it was allowing banks for the first time to invest in overseas stocks and structured equity products. HSBC Holdings and its 62%-owned Hang Seng Bank have issued internal memos setting a target of a 10% increase in pretax operating profit this year. HSBC rose 1.3% in Hong Kong.
Shanghai Composite Index gained 0.6% to end at 4,046.39. Australian S&P/ASX 200 closed 0.8% higher to 6,345.10, Singapore Straits Times Index gained 1.6% to 3,501.10 and Taiwan Weighted index closed nearly flat at 8,030.56. South Korean Kospi finished 0.1% to 1,605.77.
8:15AM DaimlerChrysler agreed to sell 80% of Chrysler for $7.4 billion.
DaimlerChrysler AG (
DCX: chart) agreed to sell 80.1% of its struggling Chrysler Group to private equity firm Cerberus Capital Management LP in a deal worth $7.4 billion. The deal is a reversal of the 1998 $36 billion merger of Chrysler with Daimler-Benz AG that aimed at creating a global auto giant. The automaker said that an affiliate of Cerberus will hold the majority stake in a new Chrysler Holding LLC while DaimlerChrysler will keep a 19.9% stake. Chrysler would keep its heavy obligations for pensions and health care costs.
DaimlerChrysler CEO said that the two companies would continue to work together, reaping the mutual benefits of cooperation. The deal is expected to complete by Q3 and that it would reduce its overall profit by some $4.05 billion to $5.39 billion for 2007. As for the name of the new company, Daimler AG will replace DaimlerChrysler. The deal is subject to shareholders’ approval. The company's stock rose more than 7% in European trading and gained 3.7% in U.S. pre-market trade.
8:00AM NY-7:00PM Mumbai Sensex surges on Monday on a rally in SBI, Reliance.
The
Sensex Index closed on Monday 169.70 points, or 1.23%, higher at 13,965.86.
The market-breadth in the session was strong with three advancers for every two decliners. For 1,641 stocks that advanced, 916 declined and 85 remained unchanged. Of the 30 stocks in the Sensex, 21 advanced, while the rest declined. The turnover on BSE was Rs 4,117 crore compared to Rs 4,446.79 crore on Friday. On NSE, the turnover was Rs 8,472.51 crore compared to Rs 9,404.94 crore on Friday.
Economic news
The annual monsoon rains will arrive at Kerala a week early on May 24, but there is no guarantee farmers would benefit from their arrival ahead of schedule. The monsoon rain is crucial to the health of the nearly one trillion dollar economy of India as it determines farm output and subsequent rural demand for a range of consumer products.
The rupee reached last week nine-year peak on Monday, following gains in other Asian currencies against the dollar, with dealers trying to test the RBI resolve to curb inflation by limiting the rise of the rupee. The rupee advanced to 40.92 per dollar on Monday up 0.7% from the close on Friday.
Trading highlights
Index heavy Reliance Industries was the most-active stock with a turnover of Rs 142 crore followed by Indiabulls Real Estate and ICRA.
Advancers
SBI gained nearly 5% to close at Rs 1,206. On Saturday, May 12 2007, the largest public sector bank of India reported a 75% growth in net profit to Rs 1,493.19 crore in Q4 March 2007, from Rs 853.29 crore in the same period a year earlier. Net interest income rose 22% to Rs 4,320 crore. Net profit was up 3% to Rs 4,541.31 crore in the year ending March 2007.
Index heavy Reliance Industries moved up nearly 2% to Rs 1,621. ONGC was up 2% at Rs 907. ICICI Bank moved up 2.5% to Rs 870. Tata Steel added nearly 4% to Rs 591. The stock has gained on renewed buying at lower level on expectation of strong Q4 March 2007 results. Tata Steel reports Q4 results on May 17.
Hindustan Lever advanced 4% to Rs 192.95 buoyed by expectations of early arrival of monsoon.
Cement shares, too, got a lift from favorable reports of monsoon. Gujarat Ambuja Cements gained 4% to Rs 124.05, Grasim 2.5% to Rs 2,490 and ACC 2% to Rs 867. Cement firms derive a large portion of their revenue from rural housing.
