[R]9:00 PM Hong Kong – The benchmark indexes in Shanghai and Hong Kong recovered after banks reported improving margins and higher net lending. Increase in commodities prices also lifted stocks of copper and coal miners.[/R]

Stocks in Shanghai and Hong Kong surged after Bank of Communications reported better than expected earnings and commodities prices rebounded. Investors cautiously looked for bargains after Shanghai index plunged 20% from its peak on August 4.

Hang Seng index in Hong Kong increased 374.63 or 1.88% to 20,328.86 and CSI 300 index in China higher 129.82 or 4.31% to 3,144.39.

Hong Kong consumer prices in July fell 1.5% from a year ago after dropping 0.9% in June. The government stimulus of HK$87.6 billion is expected to revive local demand and support prices in the last quarter of the year.

Gainers & Losers

Bank of Communications increased 4.4% to 9.19 yuan after it reported first half income of 7.62 billion yuan and said net margins improved in the second quarter.

Industrial and Commercial Bank of China increased 3.3% to 4.75 yuan after it reported first half flat earnings of 66.4 billion yuan on net feees and commissions income increase of 13% to

Haitong Securities Co increased 4.4% to 14.65 yuan after it reported first half profit increased 22% from a year ago period.

Rising commodities prices lifted stocks of coal, copper mining companies and steelmakers.

Shenhua surged 7.9% to 32.50 yuan and China Coal soared 9.6% to 12.64 yuan. Jiangxi Copper increased 4% to 36.70 yuan. Datong Coal Industry surged 8.6% to 39.46 yuan.

Petroleum explorer and refiners increased after crude oil prices surged 4% in New York trading.

China Petroleum & Chemical Corp increased 2.9% to 13 yuan and PetroChina Surged 6.9% to 13.88 yuan.

China Yangtze Power Co. increased 5.4% to 13.49 yuan after the parent company China Three Gorges Project Corp increase its stake in the company to 62.17% from 62.07%.

China Mobile closed unchanged at HK$82.95 and after the close reported first half profit and sales growth slowed.

Earnings Review

Industrial and Commercial Bank of China Limited, the commercial bank reported first-half net interest income fell 12% to Rmb 116 billion from Rmb 131.8 billion a year ago. Net profit in the first-half rose 2.9% to Rmb 66.4 billion or Rmb 0.20 per diluted share compared to net profit of Rmb 64.5 billion or Rmb 0.19 per share a year ago.

Value Partners Group Limited, an investment company reported first-half revenues fell 42% to HK$162.8 million from HK$281.5 million a year ago. Net profit in the first-half rose 228% to HK$116.1 million or HK7.2 cents per diluted share compared to net profit of HK$35.4 million or HK2.2 cents per share a year ago.

Yingli Green Energy Holding Company Limited, the vertically integrated photovoltaic product manufacturers reported second quarter net interest income fell 24.6% to Rmb 1.50 billion from Rmb 1.99 billion a year ago. Net loss in the quarter was Rmb 393.7 million or Rmb 3.03 per ADS compared to net profit of Rmb 203.9 million or Rmb 1.57 per ADS a year ago.

China Mobile Limited, the phone company reported first-half revenues rose 9% to Rmb 212.9 billion from Rmb 195.5 billion a year ago. Net profit in the first-half rose 1.4% to Rmb 55.33 billion or Rmb 2.72 per diluted share compared to net profit of Rmb 54.55 billion or Rmb 2.68 per share a year ago.

Asian Markets Review