6:00AM New York, 6:00PM Hong Kong - China to subsidize refiners for losses from high cost of crude oil in the international markets. Ping An gained 5% after it scrapped its plan to offer stocks in retail offering but sell them in a private placement.]
Stocks in Hong rose trekking the advance in larger markets in the region on the optimism that weakness in U.S. residential market and banking sector may not spread to the wider economy and drag global economy.
In Hong Kong trading Hang Seng Index rose 2.17% or 523.89 to 24,721.67, and the China Enterprises Index of Hong Kong-listed companies, or H shares, advanced 2.68% or 339.82 at 13,015.25.
In Shanghai trading, CSI 300 Index fell 0.15% or 4.95 at 3,267.55.
Daily turnover on main-board was HK$81.29 billion compared with HK$79.89 billion on Friday last week.
Chinese refiners to get subsidies for losses
Xinhua News Agency reported today that according to separate statements from China Petroleum and Chemical Corp. (Sinopec) and PetroChina. Co., the two companies will receive """"appropriate"""" monthly subsidies for losses retroactive to April 1.
Oil refiners’ margins have been squeezed by rising oil prices and a government lid on petroleum. Crude oil prices rose to a record $117 per barrel.
In addition, the government will refund value-added tax (VAT) levied on some of PetroChina and Sinopec''s imported oil products in the second quarter.
Sinopec profits to fall by 50%
Separately, China Petroleum and Chemical Corporation (Sinopec) said in its preliminary estimation the company’s net profit is expected to fall by more than 50% in the first quarter of 2008 from a year ago.
Sinopec blamed the losses to steep rise in crude oil in the international market and a cap on the prices of petroleum products that was imposed by the Government.
Recently the ministry of finance announced early this week a tax rebate to oil companies to limit their refining losses.
Through the new dispensation, Sinopec will get a rebate on imports of 500,000 tons of gasoline and 1.5 million tons of diesel from April 1 to June 30 this year.
Gainers & Losers
Insurance company Ping An gained 5% on news reports that the insurer has opted to place shares to selected banks, including China Construction Bank, instead of selling them to the public.
Also, China Life gained 3.65% on hopes that insurance firms could benefit from buying non-tradeable Chinese shares through private placements.
Oil refiners rose after two biggest oil refiners reported today that the government will subsidize losses in the current quarter. COSCO increased 6.96% ahead of its results on Tuesday.
Sinopec Corp spiked 1.77 % and PetroChina rose 3.05% on the news. |
