UPDATE 1-China Longyuan Power shares rise 13 pct 10 Dec 2009 10:55

* Indicated 13 pct higher pre-debut

* Sold 2.1 bln shares, 30 pct of enlarged share capital

* Joint 8th-biggest IPO in world so far this year

(Adds details)

By Kennix Chim and Leonora Walet

HONG KONG, Dec 10 (Reuters) - Shares in China Longyuan Power Group Corp Ltd <0916.HK>, the fifth-largest wind power generator in the world, were indicated 13 percent higher ahead of their Hong Kong debut on Thursday following a $2.2 billion IPO that drew keen interest.

Investors are hungry to buy into renewable energy stocks in order to tap the fast growing sector, but a glut of IPOs and market volatility following Dubai's credit problems have taken some of the steam out of the market.

Longyuan is a major subsidiary of China Guodian Corporation, one of China's five largest power generation groups. The IPO had attracted sovereign wealth fund China Investment Corp (CIC), U.S. billionaire investor Wilbur Ross and China Life Insurance Group.

Longyuan shares traded at HK$9.20 at 0211 GMT, compared with their IPO price of HK$8.16, which was at the top of an indicated range. The benchmark Hang Seng Index <.HSI> rose 0.9 percent.

In grey market trade on Wednesday, Longyuan's stock ended 12 percent higher, according to Phillip Securities.

"Investors can grab a profit when Longyuan shares have about a 10 percent gain, given its high valuation and market volatility," said Jackson Wong, investment manager at Tanrich Securities.

The price rise was in line with market expectations even though the United Nations this week blocked Longyuan's bid for carbon financing for five wind projects in China.

That rejection would represent less than 1 percent of the company's net income this year, Longyuan said, adding that the decision won't have a "material adverse" effect on its business.

Under Kyoto's Clean Development Mechanism (CDM), companies can invest in clean energy projects in emerging countries like China and receive carbon offsets which can be sold for profit.

CDM is approved on the basis of "additionality", ensuring that carbon financing only goes to projects that would otherwise be unprofitable.

Longyuan did not say if it has other projects pending CDM registration. There are over 200 Chinese wind farms in the CDM pipeline currently.

Longyuan, Asia's largest wind power generator, sold 2.1 billion shares, or 30 percent of its enlarged share capital.

The Hong Kong retail tranche was about 235 times subscribed. The popularity triggered the clawback option, raising the retail portion to 20 percent of the total offering from 5 percent.

Longyuan's offer price represents a multiple of 28.9 times forecast 2010 earnings, in line with Spain's Iberdrola Renovables' <IBR.MC> 27.2 times and EDP Renovaveis' <EDPR.LS> 30 times, according UBS research.

The underwriters on average estimated Longyuan's 2009 earnings would more than double to 890 million yuan ($130 million), and double again to 1.78 billion yuan in 2010.

Morgan Stanley <MS.N> and UBS <UBSN.VX> were handling Longyuan's deal.

For FACTBOX on world top-10 IPOs this year, click [ID:nSP534106]

(Editing by Ian Geoghegan) (US$1=HK$7.75=6.83 yuan)

((kennix.chim@thomsonreuters.com; +852 2843 6313; Reuters Messaging: kennix.chim.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

Keywords: LONGYUAN/

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Longyuan raises $2.2 bln in HK IPO- sources 04 Dec 2009 09:58

* Raises $2.2 billion in world's eighth-largest IPO-sources

* Sells 2.1 bln shrs or 30 pct of enlarged share capital

* Shrs priced at HK$8.16 each vs HK$6.26-8.16 range-source

(Adds details, background)

HONG KONG, Dec 4 (Reuters) - China Longyuan Power Group Corp Ltd, Asia's largest wind power generator, raised $2.2 billion in the world's eighth-largest IPO this year, when it priced its Hong Kong initial public offering at the top of an indicated range, sources familiar with the deal said on Friday.

Investors are hungry to invest renewable energy stocks in order to tap the fast growth of the sector, despite currently volatile market conditions.

Longyuan, the fifth-largest wind power generator in the world, is a major subsidiary of China Guodian Corporation, one of China's five largest power generation groups.

China aims to boost wind-generated power to 100 GW by 2020 with investments possibly worth over $150 billion, which will likely make it the world leader in wind energy.

Longyuan's offering had attracted the interest of China's sovereign wealth fund China Investment Corp (CIC), U.S. billionaire investor Wilbur Ross and China Life Insurance Group.

The company sold 2.1 billion shares, or 30 percent of its enlarged share capital, at HK$8.16 each, compared with a range of HK$6.26 to HK$8.16, the source said.

Longyuan's offering price represents a multiple of about 22 times to 28.9 times forecast 2010 earnings.

By comparison, global wind peer Spain's Iberdrola Renovables <IBR.MC> trades at 27.2 times 2010 forecast earnings while EDP Renovaveis <EDPR.LS> trades at 30 times, according to UBS research report.

Longyuan's trading debut is set for Dec 10, under the symbol "916" <0916.HK>.

Longyuan had a 24 percent share of China's wind power market in terms of total installed capacity as of the end of 2008.

The company had 3,032 MW of consolidated wind power generating capacity at the end of the third quarter 2009.

The underwriters, on average, estimated Longyuan's 2009 earnings would jump 164 percent to 890 million yuan ($130 million), and a further 100 percent to 1.78 billion yuan in 2010.

Longyuan's IPO was handled by Morgan Stanley <MS.N> and UBS <UBSN.VX>.

Renewable energy accounts for just a fraction of a percent of China's total electricity output. Coal-dependent China hopes to bring that up to 10 percent by 2010 and 15 percent by 2020. (US$1=HK$7.75=6.827 yuan) (Reporting by Kennix Chim; Editing by Valerie Lee) ((kennix.chim@thomsonreuters.com; +852 2843 6313; Reuters Messaging: kennix.chim.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)

Keywords: LONGYUAN IPO/

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FACTBOX- Who's who in biotech seed arena 11 Nov 2009 16:06

Nov 10 (Reuters) - While Monsanto Co is considered a leader in research, development and marketing of genetically modified crops, a handful of other corporate giants are also staking a claim to feeding the world with biotech corn, soy and other crops.

The companies all say they are focused on products that will increase crop yields, aid farmers and offer better nutrition for consumers. Here's a look at some of the top players:

* Monsanto Co <MON.N> - Based in St. Louis, the company posted record net sales of $11.7 billion and net income of $2.1 billion for fiscal 2009. Among its key products are corn, soybeans and cotton that tolerate weed-killing treatments and resist pests.

* Pioneer Hi-Bred - Subsidiary of DuPont <DD.N> based in Johnston, Iowa. Produces, markets and sells hybrid seed in nearly 70 countries worldwide and is the closest rival to Monsanto for market share in U.S. biotech corn seed market. Revenue totaled $4 billion in 2008.

* Syngenta AG <SYNN.VX> - The Basel, Switzerland-based company operates in 90 countries and generated 2008 sales of $11.6 billion. Collaborating with International Rice Research Institute to improve rice.

* Dow AgroSciences - Subsidiary of Dow Chemical Co <DOW.N> based in Indianapolis, Indiana. With global sales of $4.5 billion, company offers insect-protected corn and cotton, among other seed products, and is expanding its research into wheat.

* BASF <BASF.DE> - Based in Ludwigshafen, Germany, this leading global chemical company is increasingly focusing its health and nutrition division on plant biotechnology to increase crop yields. Like its rivals, BASF is working on a drought-tolerant corn seed. Revenue in its agricultural division totaled 3.4 billion euros in 2008.

* Bayer CropScience AG - The unit of Bayer AG <BAYGn.DE>, had 2008 sales of 6.4 billion euros and operates in 120 countries. The company is pursuing 56 "bioscience" research projects involving six crops

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Hong Kong IPO Pipeline - Nov 10 10 Nov 2009 12:38

    HONG KONG, Nov 10 (Reuters) - The following are some of the 
major companies planning initial public offerings on the Hong 
Kong stock exchange. 
    Please contact Kennix Chim (+852) 2843-6313 to submit entries 
for this diary. 
    Click on the square bracket for the latest story. 
    * Denotes new entry or update 
=============================================================== 
DEBUT  COMPANY           SHRS    PRICE      MANAGERS   PROCEEDS 
DATE                     (MLN)  (HK$/SHR)              (US$MLN) 
=============================================================== 
*Nov  Mingfa (relaunch)   900   2.39      Merrill Lynch,   278 
 13   [ID:nHKG280979]                     Deutsche Bank 
--------------------------------------------------------------- 
*Nov  China High        250     4.00       Macquarie,      129 
 13   Precision                            Daiwa, 
      Automation Group Ltd                 SHK Financial 
--------------------------------------------------------------- 
*Nov  CPMC Holdings    200     5.39        CICC, BOCI     139 
 16   [ID:nHKG286200] 
--------------------------------------------------------------- 
Nov   Longfor Properties  1,000 6.06-7.10 Citigroup, UBS,  916 
 19   [ID:nHKG69996]                      Morgan Stanley 
--------------------------------------------------------------- 
*Nov  Fantasia Group    1,458  1.75-2.20  Deutsche Bank,   414 
 25   [ID:nSP240578]                      CITIC Securities, 
                                          ICBCI, BOCI, 
                                          Goldman Sachs 
--------------------------------------------------------------- 
*Nov  Sany Heavy         500     4.10-4.80  HSBC           310 
 25   Equipment International 
      Holdings Co Ltd 
      [ID:nHKG225038] 
--------------------------------------------------------------- 
*Nov  China Minsheng   3,320   8.50-9.50   UBS, BOCI     4,070 
 26   Banking Corp                         CICC, Macquarie 
      <600016.SS>                          Haitong Securities 
      [ID:nSP400540]  
--------------------------------------------------------------- 
*Nov  Sands China      1,870   10.38-13.88 Goldman Sachs  3,349 
 30   [ID:nN08513238]                      UBS, Citi, 
                                           BNP Paribas, 
                                           Barclays, CLSA 
--------------------------------------------------------------- 
*Dec  China Longyuan    2,100     N.A.    Morgan Stanley   1,300 
2009  Power Group                         UBS 
      [ID:nHKG249839] 
--------------------------------------------------------------- 
Dec   Clive Palmer's      N.A.    N.A.   Macquarie, 2,000-3,000 
2009  Resourcehouse                      UBS 
      [ID:nHKG146030] 
--------------------------------------------------------------- 
*Dec  UC RUSAL            N.A.    N.A.   BNP Paribas,     2,000 
2009  [ID:nLU240742]                     Credit Suisse, 
      [ID:nHKG255026]                    BOCI, ML 
--------------------------------------------------------------- 
*End  China Forestry     N.A.    N.A.    UBS,             200 
2009  Holdings Co Ltd                    Cazenove Asia 
--------------------------------------------------------------- 
NIL   Excellence Real    3,000   2.10-2.60 Morgan Stanley, 1,000 
      Estate (postponed)                   UBS, ICBC 
      [ID:nHKG275903] 
--------------------------------------------------------------- 
2009  Wilmar             7330     N.A.    BOCI,          3,000 
/2010 International's                      Goldman, 
      <WLIL.SI> China unit                 Morgan Stanley 
      [ID:nSIN488550] 
      [ID:nHKG239989] 
--------------------------------------------------------------- 
End   Risun              N.A.     N.A.   Goldman          300 
2009 
--------------------------------------------------------------- 
End   China SCE           N.A.    N.A.   Deutsche Bank,     400 
2009  Property Holdings                  Morgan Stanley 
      [ID:nHKG320663] 
--------------------------------------------------------------- 
Q4    Lung Ming           N.A.    N.A.                500-1,000 
2009  [ID:nHKG44842] 
--------------------------------------------------------------- 
2009  China Pacific       N.A.    N.A.      CICC,        3,500 
/2010 Insurance (Group)                     CS, UBS, 
      Ltd <601601.SS>                       Goldman 
      [ID:nSHA309267] 
--------------------------------------------------------------- 
Q1    AIA <AIG.N>         N.A.    N.A.    Morgan Stanley, 4,000 
2010  [ID:nHKG20632]                      Deutsche Bank  
--------------------------------------------------------------- 
2010  Xinjiang Goldwind  242-278  N.A.      N.A.          1,000 
      Science & Technology 
      <002202.SZ> 
      [ID:nSHA150131] 
--------------------------------------------------------------- 
*2010  Swire Properties   N.A.    N.A.      N.A.          3,870 
       [ID:nHKG129751] 
       [ID:nHKG152788] 
--------------------------------------------------------------- 
*Q1    SouthGobi Energy  N.A.    N.A.      Citi, Macquarie  250 
 2010  Resources <SGQ.V> 
       [ID:nHKG72545] 
--------------------------------------------------------------- 
2012  Shenyang Beifang    N.A.    N.A.      N.A.          1,000 
/2013 Jiaotong Group       [ID:nSHA292372] 
--------------------------------------------------------------- 
 (Reporting by Kennix Chim and Fion Li; Editing by Ken Wills) 
 ((alison.leung@thomsonreuters.com; +852 2843 6369; Reuters 
Messaging: alison.leung.reuters.com@reuters.net)) 
 ((If you have a query or comment on this story, send an email to 
news.feedback.asia@thomsonreuters.com)) 
    
   
Keywords: HONGKONG IPO DIARY 

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SocGen's top analyst sees market lows next year 10 Nov 2009 12:53

* Edwards sceptical of efficacy of extreme policy responses

* Anticipates recession for Chinese economy

* Expects demand for Japanese government bonds to wane

(Adds details on Japan)

HONG KONG, Nov 10 (Reuters) - Albert Edwards, a top analyst with French bank Societe Generale <SOGN.PA>, expects global markets to hit a new low in 2010, adding that he would not be surprised if the global economy enters another recession next year.

Edwards, one of the leading equities bears and a long-term critic of the policies of Western central banks, is sceptical of popular opinion that extreme policy response will safeguard the West against a repeat of Japan's lost decade of the 1990's.

Edwards said he expected that at some point China would go into recession, calling people's excessive faith in growth stories a "sick joke".

Japan would run into difficulty funding itself next year as demand for Japanese government bonds waned and bond yields rose further, he said.

The significance of higher Japanese government bond yields was that it would cause some Japanese investors, who have been investing overseas in search of higher returns, to bring that money back home, he said.

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FACTBOX:Asia-Pacific central banks' divergent views on gold 05 Nov 2009 19:43

Nov 5 (Reuters) - Gold crested $1,097.25 an ounce on Wednesday, a day after India's purchase of 200 tonnes of bullion sparked speculation of further central bank buying despite the metal's record-breaking run towards $1,100. [ID:nSP375900]

Asia's main central banks now hold bullion worth around $101.2 billion tonnes of gold. The world's biggest holder of gold, the U.S. Federal Reserve sits on 8,113.5 tonnes of gold worth $284.4 billion.

For a timeline on gold's meteoric rise see [ID:nSP532257]

For a graphic on the world's top gold reserve holders: http://graphics.thomsonreuters.com/119/GLD_TP121109.gif Here is an overview of Asian countries' holdings of and positions on the metal.

Reserve value based on current price of $1,090.85 an ounce or $35.057 million per tonne

CHINA

HOLDINGS: 1,054 tonnes

VALUE: $36.95 billion

LAST MAJOR PURCHASE: Announced in April it had bought 454 tonnes of domestically produced gold over the past six years.

STATUS: The world's top gold producer, and Asia's top gold holder, China has the world's sixth largest reserves. Researchers with the ruling Communist Party have recommended buying more gold to boost holdings.

Ongoing national debate about the need to reduce exposure to the dollar and U.S. assets, in case America's ultra-loose fiscal and monetary policy rekindles inflation and erodes the value of the dollar and U.S. Treasuries, may see it chase more gold.

JAPAN

HOLDINGS: 765.2 tonnes

VALUE: $26.8 billion

LAST MAJOR PURCHASE: Japan's holding of gold has been kept at 24.60 million troy ounce since mid-2001.

STATUS:The government, which manages the reserves rather than the central bank, has said it will manage them by paying maximum attention to the safety and liquidity of the reserves.

INDIA

HOLDINGS: 557.7 tonnes

VALUE: $19.6 billion

LAST MAJOR PURCHASE: Purchase of 200 tonnes of gold from the International Monetary Fund on Nov. 3 propelled it into the global top ten for the first time. [ID:nSP375900]

STATUS: India is the world's biggest consumer of gold, primarily in the form of jewellery and investment among its billion-plus people. However its central bank had given few indications of being a front-runner in the move to diversify into bullion, and the proportion of gold as part of its total foreign reserves fell over recent decades.

TAIWAN

HOLDINGS: 423.6 tonnes

VALUE: $14.9 billion

In October 2006, the central bank said the island had $10.1 billion of gold in its reserves.

LAST MAJOR PURCHASE:

STATUS: Taiwan's central bank is studying whether to increase the amount of gold in its forex reserves. Taiwan's foreign exchange reserves, which rank behind China and Japan in Asia, rose to a record high of $332.2 billion at the end of September, mainly due to the euro and yen appreciating against the U.S. dollar. The figure that the central bank announced does not include gold.

AUSTRALIA

HOLDINGS: 79.9 tonnes

VALUE: $2.8 billion

STATUS: Reserve Bank of Australia (RBA) policy is not to comment on its reserve management, but historic, economic and political factors mean it is not likely to be a big gold buyer.

The bank sold much of its gold reserves in 1997, noting then that there was little need for it to hold the metal given there was so much of it in the ground in Australia.

It also does not have major reserves to diversify. Of over A$43 bln in reserves, just A$2.9 bln is in gold.

Politically, the idea of the RBA, the central bank of one of the world's largest gold producers, buying foreign gold from the IMF, would not go down well with one of the country's economic backbones -- the mining industry.

SRI LANKA

HOLDINGS: 5.3 tonnes

VALUE: $185.8 million

LAST MAJOR PURCHASE: On Nov. 5 the Sri Lankan central bank governor said it has been buying gold for the past five or six months. [ID:nHKG262718]

STATUS: The Central Bank Governor said the country hasn't stopped buying gold yet, as it is a natural means of diversifying.

Source: Reuters, World Gold Council

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-CECIC to list wind power unit in HK mainland 04 Nov 2009 14:54

SHANGHAI, Nov 4 (Reuters) - China Energy Conservation Investment Corp (CECIC) plans to list its wind power unit in Hong Kong next year, and on the mainland afterwards, a senior executive told Reuters on Wednesday.

China's Social Security Fund, Everbright Ltd <0165.HK>, and China Development Bank have become strategic investors, which take a 40 percent stake in total, Li Longsheng, vice president of CECIC, said on the sidelines of a conference.

"We will list the wind power unit first," said Li, "(We) will list H-shares in Hong Kong, then return to A-share. It will be really fast," said Li, who declined to comment on the size of the IPO.

The company's capital is expected to be 1.6 billion yuan after raising money from strategic investors, Li added.

CECIC, controlled by the central government, is already operating wind power generators with a total install capacity of 300 megawatts (MW), according to its website (www.cecic.com.cn).

Li said the company also plans to list its renewable energy unit in the future.

"Urban waste management, water treatment, power generation from sludge, and biomass power generation in rural areas...we have pilot projects in these areas," said Li. The renewable energy unit expects to achieve installed capacity of 120,000 kilowatts in its five biomass power generation projects by 2010. By 2015, it expects to build another 50 projects with a total installed capacity of 1,320 MW, the company's website said.

CECIC's revenue in 2008 was less than 20 billion yuan, but the company aims at expanding the revenue to 100 billion yuan by 2012, he said.

CECIC also operates China's biggest on-grid solar power project with installed capacity of 10 MG in the northern region of Ningxia, which is only the first phase of a total 50-MW project. [ID:nN30215430]

China's renewable energy sector has grown remarkably in recent years, as Beijing pushes for sustainable development, but overcapacity is already threatening polysilicon and wind power equipment industries as a result of blind expansion. (Reporting by Rujun Shen and Edmund Klamann; Additional reporting by David Lin; Editing by Ken Wills)

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The top 5 restaurants in Hong Kong and Macau 03 Nov 2009 13:35

INGAPORE, Nov 3 (Reuters Life!) - The Miele Guide to Asia's finest restaurants is written by food experts who know and love the region (www.mieleguide.com).

This is a list of the top 5 restaurants in Hong Kong, long renowned as a regional gastronomic hub, and Macau. It is not endorsed by Reuters.

1. L'Atelier de Joel Robuchon, Hong Kong

A stunning restaurant that excels in all areas. The service is as close to perfection as you can find. The food is delicately magnificent, with dishes that are comforting and others that are novel and will thrill the palate and the imagination. The wine list is impeccable. And both the location and the setting are divine. While we highly recommend dining at the counter, where you can watch executive chef Sebastien Lepinoy and his team cook and plate the delicacies on offer, those seeking a little more privacy can opt to eat in the restaurant's small but chic dining room. In many ways, L'Atelier de Joel Robuchon represents the future of dining: a restaurant that offers amazing but not overly challenging food, with perfect service and in a cool but entirely unpretentious setting.

Shop 401, 4F The Landmark

15 Queen's Road, Central Hong Kong

www.robuchon.hk 2. Robuchon A Galera, Macau

Robuchon a Galera, the supremely high-brow French restaurant in the splendidly over-the-top Hotel Lisboa, is proof that formal fine dining isn't dead. The restaurant's blue and gold-themed neo-Empire interiors are theatrically luxurious and just a little over-the-top. The over-burdened breadbasket, dessert and petit four trolleys are always greeted enthusiastically. The flatware is appropriately Christofle, and Bernardaud porcelain lithophane votive lights dot the starched tablecloths. But the real draw is the consistently outstanding food on offer and a wine list that would make any oenophile weep. Executive chef Francky Semblat creates masterful dishes that are elegant, rich and flavourful.

3F New West Wing

Hotel Lisboa

2-4 Avenida de Lisboa

www.hotellisboa.com

3. Yung Kee, Hong Kong

Yung Kee is virtually synonymous with Hong Kong, and no visit to the city is complete without a taste of its world famous roast goose. The restaurant itself runs like a well-oiled machine: uniformed doormen help people alight from their cars; a walkie-talkie-wielding receptionist tells the lift operator which floors guests should be taken to and informs the floor manager who's coming up so she can greet them by name. Regulars also know to order certain things in advance: the roast goose livers, the tea-smoked pork belly, or, when in season, the hairy crab dishes and platefuls of tiny rice birds, which are eaten whole (except for the beak). Executive chef Choi Wai-Chor ensures that the food is consistently good, authentically local, and comfortably unchanging.

32-40 Wellington Street

Central Hong Kong

www.yungkee.com.hk

4. Nobu, Hong Kong

Nobu Matsuhisa's sexy black and tan restaurant in Hong Kong has, in just three years, established itself as a firm favourite in one of Asia's toughest food cities. Fantastically located on the second floor of the InterContinental Hotel, Nobu Hong Kong has breathtaking, panoramic views across Victoria Harbour. The restaurant is chic yet casual, perfect for every occasion from a first date to a family meal. Norwegian-born executive chef Oyvind Naesheim, who was previously second-in-command at Nobu's very popular London outlet, is maintaining Nobu's stratospheric culinary standards, with the assistance of executive sushi chef Hideki Endo and the rest of his team.

2F InterContinental Hong Kong

18 Salisbury Road

Kowloon

www.noburestaurants.com

5. Caprice, Hong Kong

It might be difficult to find a more glamorous dining room anywhere in Asia. Caprice, the Four Seasons Hong Kong's signature French restaurant, is fantastically chic and romantic. Four large crystal chandeliers hang over well-dressed diners. Floor-to-ceiling windows frame unbeatable views of Victoria Harbour and Kowloon's skyline. Even the open-kitchen, sparkling under crystal-clad cooker hoods, is breathtaking. The food, of course, is brilliant. Chef Vincent Thierry's dishes are modern interpretations of French classics, some of which are inventively and subtly perked up with well-chosen Asian ingredients. And pastry chef Ludovic Douteau's desserts are masterpieces.

Caprice

Hong Kong

6F Four Seasons Hong Kong

8 Finance Street, Central Hong Kong

www.fourseasons.com/hongkong/dining/caprice.html

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ANALYSIS-China's renewable curbs a boon to big players 30 Oct 2009 10:13

* Beijing trying to address overcapacity, collapsing prices

* Curbs to improve outlook for big wind, polysilicon firms

* Strong balance sheets, scale to support big players

(Repeats item first filed late on Thursday)

By Leonora Walet, Asia Green Investment Correspondent

HONG KONG, Oct 29 (Reuters) - China's efforts to curtail expansion in its renewable energy sector should brighten prospects for the country's more established wind equipment and solar companies, as curbs on excess capacity squeeze out smaller competitors.

Solar firm Yingli Energy Holdings <YGE.N>, wind gear maker China High Speed Transmission <0658.HK> and solar components company GCL-Poly Energy Holdings <3800.HK> are likely to survive the reforms largely unscathed thanks to their strong balance sheets and massive production capacity.

For smaller companies, the government's plan to withhold approval of new investments and shut off funding for projects is likely to deliver a crushing blow for this part of the sector that makes up nearly 50 percent of the market.

"Sadly for many, the party's over even before it began," said KK Chan, chief executive of private equity firm Nature Elements Capital. "But this is something the sector needs now and is consistent with the government's long-term goal."

Earlier this month, China launched its latest attempt to rein in industrial overcapacity targeting key sectors, chief among them steel and cement.

The move, however, also included Beijing's first moves to restrict investment in the renewables sector. It comes after more than a dozen companies piled into wind equipment and polysilicon-making projects, encouraged by state policies and cash perks launched early this year.

PRICES WEAK

Despite its efforts, Beijing's hard-line stance on expansion is unlikely to end the industry's struggle with collapsing prices and massive overcapacity.

"Capacities at factories are just so huge, China could easily supply all of the world's expected solar demand next year," said Wendy Wang, analyst at Yuanta Securities (Hong Kong).

Renewable energy accounts for just a fraction of a percent of China's total electricity output. Coal-dependent China hopes to bring that up to 15 percent by 2020.

By the end of 2009, capacity at China's polysilicon firms will reach 52,200 metric tons, according to Yuanta.

That's equivalent to feeding solar power stations with a combined capacity of 8.0 gigawatts, which is sufficient to supply the energy needs of a country the size of the Philippines.

Global solar demand in 2010 is expected at just 7.0 gigawatts and the over-supply has hammered prices.

Spot prices of polysilicon have fallen to $63 a kilogram now, from its peak of over $400 in August last year and compared to global production costs around $30-50 kg.

Larger, better resourced and more efficient polysilicon makers such as GCL, LDK Solar Co <LDK.N> and Renesola <SOLA.L> are expected to better withstand the slimmer margins than newer, smaller rivals.

WIND

Wind turbine prices have also slipped as combined capacity builds to hit an estimated 40 gigawatts this year, also far surpassing demand. China is estimated to add on average 10 to 15 GW of wind power yearly.

Xinjiang Goldwind Science and Technology Co <002202.SZ> and Dongfang Electric <600875.SS> are among biggest of 70 Chinese wind turbine suppliers.

"The wind turbine market has become competitive arena this year and price pressure will increase in 2010," said KGI analyst Stephen Wang.

GCL-Poly Energy, Yingli Energy, and China High Speed Transmission remain top picks by many brokerage houses in the renewables sector, thanks to their strong output and a wider customer base which is helping boost margins.

Shares in these companies have risen over 70 percent this year. (Editing by Lincoln Feast) ((leonora.walet@thomsonreuters.com; Reuters Messaging: leonora.walet.reuters.com@reuters.net; +852 2843 6358, Fax +852 2845 0636)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

Keywords: RENEWABLE/CHINA

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China Mobile 3Q results

Kevin Yim –kevin.yim@guoco.com (852) 2218 2861
Event: China Mobile and China Telecom reported 3Q09 results.
  China Mobile (941)’s 3Q09 earnings up 2.6% yoy to RMB 28.6bn, in-line with market consensus. 1H09 net
profit increased 1.4% yoy. Revenue grew 9.0% yoy in 3Q09 despite a 3.9% yoy decline in ARPU to RMB74.6.
MOU up 0.8% yoy to 490 as a result of higher portion of low usage customers. Blended revenue per minute
decreased 8.6% yoy due to intensified competition. EBITDA margin was the same as 2Q09 ’s 50.7%.
  While 3Q09 results were broadly in-line, September net adds improved to 5.43mn (Aug 09: 5.26mn) thanks to
continuous economic recovery. 3G net adds were still very weak at 328k, however.
  We believe CM will be lack of growth prospect from now on amid increasing competition and saturating highend
market. Nevertheless, CM is defensive for its strong net cash ($12.5 per share as at end-Jun) and stable
business. At 12.0x 2010 PER, valuation has fully reflected company’s fundamentals, in our view. We maintain
HOLD on CM with target price slightly revised down to $80.0, representing 12.0x 2010 PER. We recommend
investors to accumulate the stock when forward dividend yield reaches 4.0%, suggesting an entry point of
$75.0.
  China Telecom (728)’s 3Q09 earnings declined 47% yoy to RMB 2.98bn that were worse than market
consensus. Revenue increased 16.1% thanks to the CDMA business incorporated in 2009. It however rose only
1% qoq that was mainly due to poor fixed line operation. CDMA MOU and ARPU up 37% and 31% to 329 and
RMB 64 respectively, reflecting the increasing popularity of its CDMA2000 services.

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COLUMN-Investment gains in China lag economic growth: Wei Gu 21 Oct 2009 10:00

By Wei Gu

HONG KONG, Oct 21 (Reuters) - Investors should think twice before putting a big bet on China. The Chinese economy may have turned out to be more resilient than people thought, but returns on Chinese equities have been lacklustre when compared to its breakneck economic growth. This is because the stock market does not yet serve as a proxy for China's economy.

Despite a stellar performance this year -- the Shenzhen index <.SZSA1> is the world's top performer among large markets -- Chinese stocks have not been especially profitable over the long term.

The Shanghai Composite Index <.SSEC> is up about 3.5-4 times its level of 15 years ago, when it first "emerged", according to Charles Dumas of Lombard Research. This represents a compound annual gain of 8.5 percent to 9 percent, which is unimpressive in a country which enjoyed a 10 percent real annual growth rate over the same period and a nominal growth rate of 15 percent.

These figures raise questions about the current investment trend of increasing exposure to emerging markets. Moreover, returns on the Chinese market are even less impressive given the often violent fluctuations of stock prices when compared to, say, U.S. equities. This volatility makes share prices less useful guides for allocating resources and increases the cost of capital to corporations.

True, the 15-year timescale chosen by Dumas may seem a bit arbitrary, and returns can be a lot higher when you take the whole 19 years. Market indexes that track just blue-chip companies, rather than the broad Shanghai Composite, have also produced better returns. Nevertheless, it is worth asking why China has so far failed to translate fast economic growth into attractive investment returns.

This poor track record is not limited to China. Most emerging Asian stock markets -- with the exception of India -- have trailed the economic performance of the underlying economy. So did Japan over the past ten years. One explanation might be that most Asian markets are relatively young, with the century-old Indian market being a notable exception.

As recently as five years ago, China's stock market was mainly made up of uninspiring and second-rate state-owned enterprises. The most profitable SOEs, such as China Mobile <0941.HK>, went public in Hong Kong or New York, as the domestic market was deemed as too small for them. The result is that the Chinese market lacks blue-chip stocks.

The equity market is also too small to represent the economy. Although China's domestic market capitalization has recently edged above that of London, most shares are owned by the state and are therefore untradeable. China has 1,631 listed companies, small when compared to 6,013 in the United States, 4,946 in Mumbai, and 2,864 in London.

Foreign investors are probably better off getting exposure to China through Hong Kong, which hosts some of China's most profitable companies. Taking out the big swings at the start from 1994-1999, the Heng Seng Chinese Enterprise Index's <.HSCE> annualized return in the past ten years is almost 30 percent.

This suggests that the problem lies not with China's economy, but with the country's capital market. Boosting returns will require tackling fundamental problems such as fraudulent financial accounting, market price manipulation, rampant company cross-holding, a large amount of locked-up shares, and frequent government intervention.

Heavy-handed government policies have played a counter-effective role. China is one of the few countries where the regulator, not the market, decides when companies should raise money. This overly complex and often opaque application and approval process, which includes considerable administrative influence, increases transaction costs.

The quality of the market also suffers from the lack of an effective de-listing system. The market capitalization of companies delisted by the Shanghai Stock Exchange last year is less than 1 percent of the value lost by the New York Stock Exchange. Mumbai got rid of 20 times more than Shanghai did last year.

In addition, the delisting rules are often too simplistic -- they are related to whether or not a profit and loss statement shows a profit, which creates a great incentive to falsify accounts if a company is in danger of being de-listed, according to Zhou Qinye, executive vice president of the Shanghai Stock Exchange.

Rampant corporate fraud and market manipulation force investors to spend undue time and energy looking for legitimate trades, and avoiding opportunistic behaviour. This has scared serious investors away, and increased the risk premium and transaction costs.

China's stock market remains largely off-limits to foreign investors, which may not be such a bad thing given the unimpressive returns. But it will be hard for China to enjoy sustained development without a mature capital market powerful enough to match its growing economic needs. Continued stock market reforms could benefit both China's economy and investors seeking emerging market returns.

- At the time of publication Wei Gu did not own any direct investments in securities mentioned in this article. She may be an owner indirectly as an investor in a fund -

Zhou's paper on the history and prospects of the Shanghai Stock Exchange can be found in China's Merging Financial Markets (John Wiley & Sons), which offer varied perspectives from top Chinese decision makers and Western financial industry leaders.

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TABLE-Asia's top department store operators 13 Oct 2009 11:40

     SEOUL, Oct 13 (Reuters) - The following table shows Asia's 
top listed department store operators by market value based on 
Thomson Reuters data. 
    For a related analysis, click on [ID:nSEO27038] 
    Company name                    PE      Est. PE   Market Cap 
                                  (time)     (time)  (bln US dlr) 
 Shinsegae          <004170.KS>    18.11      17.47         8.91 
 Lotte Shopping     <023530.KS>    12.03      13.26         7.67 
 Parkson Retail     <3368.HK>      38.90      33.20         4.83 
 Isetan Mitsukoshi  <3099.T>       80.05      17.02         4.18 
 Golden Eagle       <3308.HK>      34.76      35.14         3.34 
 J.Front Retailing  <3086.T>       36.87      39.89         2.99 
 Lifestyle Intl     <1212.HK>      23.45      22.61         2.76 
 Takashimaya        <8233.T>       18.76      29.03         2.46 
 David Jones        <DJS.AX>       18.22      16.94         2.51 
  
 Note: Some of the companies have a wider business portfolio in 
the retail sector, including discount and convenience stores. 
 (Reporting by Rhee So-eui; editing by Dhara Ranasinghe) 
 ((soeui.rhee@thomsonreuters.com; +82 2 3704 5650; Reuters 
Messaging: soeui.rhee.reuters.com@reuters.net)) 
 ((If you have a query or comment on this story, send an email to 
news.feedback.asia@thomsonreuters.com)) 

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Top 10 chocolate museums

SYDNEY, Oct 16 (Reuters Life!) - For people who love chocolate and love travel, what could be better than a chocolate museum.

The members and editors of VirtualTourist.com (http:\\www.virtualtourist.com) have compiled a list of the World's Top 10 Best Chocolate Museums. Reuters has not endorsed this list.

1. The Cologne Chocolate Museum; Cologne, Germany

Located on the Rhine River, this futuristic building gives visitors three floors of chocolate history to ponder, but the real centre of attention here is the famous chocolate fountain. Museum staff dip waffles in the hot liquid for salivating guests.

2. Musee les Secrets du Chocolat; Geispolsheim, France

Complete with theatre, tea room, and gift shop that sells chocolate pasta, chocolate vinegar, chocolate beer and decorative antique chocolate molds, this museum is every bit as elegant as the country it represents.

3. Pannys Amazing World of Chocolate, Phillip Island Chocolate Factory; Newhaven, Phillip Island, Victoria, Canada

This facility houses such tongue-in-cheek exhibits as statue of David replicas, a Dame Edna mural and an entire chocolate town. Aside from the eye candy, visitors are treated to real candy with a chocolate sample upon arrival.

4. Choco-Story Chocolate Museum; Bruges, Belgium

In addition to dedicating a section of the museum to the health benefits of chocolate, this museum also houses a quirky collection of chocolate tins that pay tribute to the Royal family.

5. Museu de la Xocolata; Barcelona, Spain

The sculptures at this museum are so impressive, you'll forget you're looking at chocolate. Subjects range from copies of serious religious works to whimsical cartoon characters.

6. The Chocolate Museum (Musee du Chocolat); St. Stephen, New Brunswick, Canada

This museum pays tribute to the Ganong Bros who were candy makers in the area and who have the distinction of introducing the world to the iconic heart-shaped chocolate box, many of which, not surprisingly, are on display here.

7. Choco-Story Chocolate Museum; Prague, Czech Republic

Chocolate may be a feast for the palate, but this museum is truly a feast for the eyes. With collections of stunning antique chocolate wrappers and demonstrations of the chocolate making process, it's hard to know what to look at first.

8. Candy Americana Museum, Wilbur Chocolate; Lititz, Pennsylvania

Started when the wife of the company president began collecting chocolate memorabilia at flea markets and antique shows, this now over-30-year old museum still admits visitors for free.

9. Chocolate Museum; Jeju-do Island, South Korea

While the chocolate workshop, "Bean to Bar" showroom, and art gallery are all impressive, perhaps this museum's biggest draw is their working San Francisco-style trolley car.

10. Nestle Chocolate Museum; Mexico City, Mexico

Known more for its modern design and the speed with which it was built (by most estimates 75 days from start to finish), this futuristic building is an exhibit in itself.

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TIMELINE-Oil's wild ride: Price moves since 2008 14 Oct 2009 14:30

 Oct 14 (Reuters) -  Oil prices rallied for a fifth day on 
Wednesday to top $75 a barrel for the first time this year, 
stoked by a weak dollar and surprisingly strong China trade data 
that underscored a recovery in the world's No. 2 oil consumer. 
    Markets have been steadily rising after a dramatic collapse 
to near $30 a barrel in December and January, from a record peak 
of almost $150 in July last year. 
    Here is a brief timeline charting the price highs since 
January 2008. 
     
    Jan. 2, 2008: U.S. crude <CLc1> briefly breaks the $100 
barrier for the first time on the first trading day of 2008. 
Prices rise fairly steadily through the first half of the year. 
    March 5: Despite new record price highs of over $104 a 
barrel, the Organization of the Petroleum Exporting Countries 
(OPEC), which pumps more than a third of the world's oil, says it 
will not put more oil on the market. It says there is enough oil, 
and blames U.S. economic "mismanagement" for global prices. 
    June 6: Prices surge $11 to a record high near $139 a barrel 
on a slumping dollar and mounting tensions in the Middle East. 
Soaring crude leads a frenzied broad-based commodity rally on 
U.S. grains and oilseed futures markets.     
    June 7: Average retail price for regular gasoline tops $4 a 
gallon for the first time in the United States.     
    July 11: Oil peaks at $147.50 for Brent <LCOC1> and $147.27 
for U.S. crude. 
    July 15: A sell-off begins after remarks by Federal Reserve 
Chairman Ben Bernanke indicating a significant fall in demand in 
the United States, the world's top consumer.     
    July 18: Oil prices drop by more than $18 from a week ago to 
$128.88 per barrel. The price fall is triggered by a 3 million 
barrel increase in U.S. crude stocks and falling U.S. demand. 
    Aug 15: Prices continue sharp decline, falling to around $110 
a barrel for Brent crude.     
    Sept 15: Prices below $100 a barrel for first time since 
March 4, and still falling.     
    Sept 22: Oil spikes $16 in biggest one-day gain on record. 
Prices pop over $120 a barrel, extending a climb from a low near 
$90 the previous week after the United States unveils a sweeping 
rescue plan for its battered financial sector.     
    But soon after, oil prices begin a heavy slide.     
    Nov 21: National average price of regular gasoline falls 
below $2 a gallon for first time since March 2005 -- dropping 3.1 
cents to $1.989.     
    Dec 19: Oil drops below $34 a barrel -- charting about a 75 
percent loss of value since July.     
    Jan 2, 2009: Oil falls more than $3 on first day of trading, 
with U.S. crude at $41.25 a barrel and Brent at $42.18.     
    Aug 25: U.S. crude rises to touch this year's resistance 
level of $75 a barrel, the first time since late-Oct 2008. 
    Sept 10: At its meeting, OPEC kept output targets steady at 
the reduced levels agreed in September 2008, as high oil prices 
of above $71 meant there was no need for action. 
    Sept 25: Saudi Oil Minister Ali al-Naimi said that $75 was a 
fair price for crude and he saw no need for OPEC to change 
production ahead of its next meeting in December. 
    Oct 14: U.S. crude rises to $75.15 a barrel, the highest in 
2009, underscored by a soft dollar and optimism over a global 
economic recovery. 
     
    Source: Reuters, Energy Information Administration 
(http://www.eia.doe.gov/emeu/cabs/MEC_Past/2008.html)  
 ((gill.murdoch@thomsonreuters.com, +65 6417 4681, Reuters 
Messaging gill.murdoch.reuters.com@thomsonreuters.net))  
 ((If you have a query or comment on this story, send an email to 
newsfeedback.asia@thomsonreuters.com))  
  

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FACTBOX-Valuation ratios of Southeast Asian telcos 12 Oct 2009 14:34

   KUALA LUMPUR, Oct 12 (Reuters) - Malaysia's top telecom 
firm, Maxis Berhad, is expected to be relisted in November in 
Southeast Asia's largest IPO in more than a decade. 
     
Here is a table of key valuation ratios of Southeast Asian 
telecom firms: 
     
Company      RIC         P/E   Price/Sales Price/Cash Flow   ROE 
     
PT Indosat  <ISAT.JK>   12.0     1.3          3.4           12.3 
PT Telkom   <TLKM.JK>   13.1     2.4          5.6           30.5 
AIS         <ADVA.BK>   15.8     2.5          7.6           25.5 
DTAC        <DTAC.BK>   14.1     1.5          5.6           10.8 
Axiata      <AXIA.KL>   15.9     1.9          6.2            8.8 
DiGi.com    <DSOM.KL>   14.9     3.1          8.0           59.0 
TM          <TLMM.KL>   19.7     1.3          4.0            8.2 
SingTel     <STEL.SI>   11.7     3.1          9.3           17.2 
Starhub     <STAR.SI>   10.8     1.5          6.0          253.1 
     
 Source: Thomson Reuters, I/B/E/S 

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UPDATE 2-Strong Wynn Macau IPO puts pressure on debut, rivals 30 Sep 2009 15:04

Wynn Macau prices IPO at HK$10.08/share - sources

* Company raises $1.63 billion, fourth largest IPO for 2009

* Successful deal puts pressure on Sands upcoming HK IPO

* High price makes strong debut more difficult - analyst

(Adds analyst quote, byline)

By Michael Flaherty and Sui-Lee Wee

HONG KONG, Sept 30 (Reuters) - Las Vegas casino company Wynn Resorts <WYNN.O> raised $1.63 billion after pricing its Asian IPO at the top of its indicated range, a sign that demand is still strong for certain offerings despite a glut of Asian stock deals.

Wynn Macau <1128.HK>, the fourth-largest global IPO this year, now faces the challenge of its Hong Kong trading debut, where several new listings have been battered by increasingly selective investors.

Wynn Macau sold 1.25 billion shares Hong Kong-listed shares at HK$10.08 each, according to two sources with direct knowledge of the deal but were not authorised to speak publicly about it.

The IPO's range was HK$8.52-HK$10.08, with Wynn selling 25 percent of the business to the public.

But some brokers said the high price may make a strong debut more difficult for Wynn.

"The valuations are really high and market sentiment is not that good now," said Conita Hung, head of equity research for Delta Asia Financial Group. "I don't expect this to be a good one."

On a 2010 enterprise value to earnings before interest, tax, depreciation and amortisation ratio (EV/EBITDA), Wynn Macau trades around 16 times, much higher than Macau gambling tycoon Stanley Ho's flagship casino firm SJM Holdings' <0880.HK> 7.5 times, according to Credit Suisse analyst Gabriel Chan.

The Macau gambling sector EV/EBITDA average trades at around 14.5 to 19.4 times, Chan said.

"It'll get a big hit," said Linus Yip, strategist at First Shanghai Securities, referring to the Wynn Macau debut. "The main concern is the price range."

"MCC had set its price at the middle of its range, but it still fell below the issue price. Valuations for Wynn are definitely still a concern."

The dismal debut of Metallurgical Corp of China (MCC), a building and engineering firm, last week has weighed heavily on investor sentiment for new share offerings in Hong Kong.

Wynn's successful sale also puts pressure on arch-rival Las Vegas Sands <LVS.N>, which plans to raise billions of dollars through a public offering in Hong Kong at the end of November or early December.

NOW THE HARD PART

The Wynn Macau offer is especially important given the deal's potential impact on the company's flagship Las Vegas operations. Wynn is hoping a high valuation through the Hong Kong listing will boost valuations at its other divisions.

U.S. casino operators, grappling with high debt levels and a recovering economy, are hoping to boost valuations through spinoffs in China's gambling hub, Macau, the former Portuguese colony located an hour away from Hong Kong by ferry.

Macau now hosts the world's biggest gambling market, which raked in record bets in August. [ID:nHKG238575]

While institutional and retail demand for Wynn Macau was strong, now comes the hard part: a strong debut that will vindicate those investors who lined up for the offering.

JPMorgan <JPM.N>, Morgan Stanley <MS.N> and UBS AG <UBSN.VX> are joint sponsors and global coordinators of the deal, with BofA-Merrill Lynch <BAC.N> and Deutsche Bank <DBKGn.DE> as joint bookrunners.

Wynn Macau attracted a combined $250 million from several so-called "cornerstone investors," or investors who take a substantial stake in the company before the offering, one of the sources said.

Among them is Thomas Lau, billionaire managing director of Lifestyle International <1212.HK>, the retailer that operates the Sogo department stores in Hong Kong's Causeway Bay and Tsim Sha Tsui districts and the Jiuguang Department Store in Shanghai.

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CORRECTED-ANALYSIS-A123's smash-hit IPO could herald more green debuts 25 Sep 2009 09:32

(Corrects company name to BrightSource Energy, not Energies, paragraph 9)

* A123's market cap zooms over $1.9 bln on first day

* More venture-backed IPOs could hit market

* Investors looking for high-growth sectors

By Poornima Gupta

SAN FRANCISCO, Sept 24 (Reuters) - A 50 percent leap in the shares of lithium-ion battery maker A123 Systems Inc <AONE.O> on their first day of trading looks likely to jumpstart the market for clean-tech share offerings.

The Watertown, Mass.-based A123 Systems is now worth over $1.9 billion, a striking valuation for a company that has yet to make a profit and still needs large-scale commercialization.

Industry executives and experts said A123's success shows investors have an appetite for green technology companies that lose money, but have tremendous potential.

So the stock's first day jump, which is the second-best performance for a debut stock in 2009, should encourage more venture capital-backed clean technology companies to go public, they added.

"This is an interesting time for the market because there are several (clean-tech) companies that have been growing very nicely," said Faysal Sohail, managing director of venture fund CMEA Capital, which is an investor in A123.

Sohail declined to comment specifically on A123, but said the whole environment is creating opportunities for clean-tech companies and expects 2010 to be a busy year for green IPOs.

"They are real companies with substantial revenue and growing at a very fast clip," he said.

CMEA Capital also backs companies such as Silicon Valley solar manufacturer Solyndra and biofuel company Codexis, which many see as likely candidates for the IPO market.

Other green companies deemed ripe for an IPO include smart grid network company Silver Spring Networks, electric carmaker Tesla Motors and solar thermal company BrightSource Energy.

Rival lithium-ion battery maker Ener1 Inc <HEV.O> also cheered A123's stock performance, which shows how much value there is in the emerging sector.

"It's great for the space. They have done a good job of getting the market excited," Ener1 Chief Executive Charles Gassenheimer told Reuters.

Ener1 went public in 2003, but used a reverse merger with a public shell corporation to do so.

Gassenheimer said the warm reception of the IPO would encourage other clean-tech companies to tap the public markets.

"Any time you have an IPO trade up as much as 50 percent, that means investor receptivity has returned," he said. "I think you will see a lot more IPOs on the back of this."

HIGH GROWTH SECTORS

A123, founded by scientists linked to the Massachusetts Institute of Technology (MIT), develops batteries for electric vehicles, plug-in hybrids and works with carmakers such as BMW <BMWG.DE>, Chrysler and General Motors Co [GM.UL].

Electric vehicles and batteries are considered markets that have immense potential for growth.

The automotive market for lithium-ion batteries, mostly found in mobile phones and computer laptops, is projected to be $32 million in 2009, but is expected to skyrocket to $22 billion in 2015, according to A123's prospectus.

"That's compelling," said Matt Therian, an analyst with Renaissance Capital, referring to the market potential. "We have seen a lot of large profitable companies go public. But a smaller one with a little more risky profile ... I think it bodes well for the health of the IPO market."

Looking forward, Therian expected plenty of the larger, cash-generating, private equity portfolio companies would go public in 2010.

"But on their heels, we could also see another wave of your more traditional growth companies," he added.

For now, A123 co-founder Yet-Ming Chiang, a professor of ceramics at MIT's department of materials science and engineering, is happy but understands the company still needs to deliver.

"It's a scientist's and engineer's dream to see something from the lab make it to commercial technology that has an impact," Chiang said. "Even though this is a significant event, there is still a lot of work to be done and tomorrow we all get back to work." (Reporting by Poornima Gupta; additional reporting by Scott Malone in Boston; editing by Andre Grenon) ((poornima.gupta@reuters.com +1-415-677-3934; Reuters Messaging: poornima.gupta.reuters.com@reuters.net)) Keywords: A123/

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China MCC's Shanghai IPO freezes up $234 billion 11 Sep 2009 08:55

* MCC Shanghai IPO freezes 1.6 trillion yuan ($234 billion)

* Demand may push its Shanghai shares up 40 pct on listing

* Plus HK offer, MCC IPO will be world's 2nd largest in 2009

By Lu Jianxin and Jacqueline Wong

SHANGHAI, Sept 11 (Reuters) - Metallurgical Corp of China (MCC), which is raising up to $5.3 billion in the world's second-largest initial public offering (IPO) this year, has seen the subscriptions to its Shanghai portion of the IPO freezing up a huge 1.6 trillion yuan ($234 billion), boding well for its listing debut later this month.

MCC, one of China's biggest engineering and construction firms, which is also active on global markets, sold 3.5 billion shares in Shanghai, or 21 percent of its expanded capital, at 5.42 yuan per share, the top end of an indicated price range, it said in a statement on Friday.

MCC has said it needs funds from the Shanghai IPO to develop overseas projects including a copper mine project in Afghanistan. It also needs funds for technical upgrades, equipment purchases, property development and supplemental working capital.

A company document issued on Thursday said MCC would start trading in Shanghai on Sept. 21 and in Hong Kong on Sept. 24.

CITIC Securities <600030.SS> was the Shanghai IPO's sole lead underwriter, while Morgan Stanley <MS.N>, Citigroup <C.N> and China International Capital Corp (CICC) are among book runners for the Hong Kong deal.

Initial analysts' estimates for its Shanghai listing debut price stand at around 7.5 yuan, rising about 40 percent from its IPO price because of huge demand and typically strong Chinese investor interest in newcomers. The estimations could be adjusted slightly in line with stock market conditions.

MCC's main retail portion of the Shanghai IPO was 91 times subscribed on Wednesday, freezing up 1.04 trillion yuan, according to Reuters calculations based on figures quoted by MCC's Friday statement published on the Shanghai Securities News.

The remaining institutional portion was 75 times subscribed on Tuesday, locking in 566 billion yuan, according to the statement. Money would be returned to unsuccessful bidders on Friday for institutions and for retail investors on Monday.

Fund demand ahead of MCC's IPO pushed China's weighted average seven-day bond repurchase rate <CN7DRP=CFXS>, the barometer of liquidity on the money market, to a one-month high of 1.80 percent on Monday, though the rate has since fallen back.

MCC is also selling up to 2.87 billion H shares in Hong Kong worth as much as HK$19.55 billion ($2.5 billion).

If it prices its H shares also at the top of an indicated price range of HK$6.16 to HK$6.81, it will raise $5.3 billion combining with the Shanghai portion to be the world's second largest IPO this year, only below China State Construction Engineering Corp's <601668.SS> $7.3 billion IPO in July [ID:nSHA330047].

MCC will use the H-share proceeds to fund payment of mining rights in Afghanistan, Argentina and Pakistan, and to fund iron and steel mine projects in Australia, India, Vietnam and Mongolia. Proceeds will also be used to repay bank borrowings and to fund potential acquisitions of overseas mineral resources. (US$1=6.83 Yuan=HK$7.8)

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Stock market may collapse again, TCW's Gundlach says

Sept 09 09

By Alistair Barr, MarketWatch

SAN FRANCISCO (MarketWatch) -- The stock market's recent rally is likely to run out of steam soon and equity prices may collapse again, Jeffrey Gundlach, chief investment officer at Los Angeles-based mutual-fund giant TCW Group Inc., said Wednesday.

The benchmark Standard & Poor's 500 index is "extremely unlikely" to climb above 1,100, before collapsing again, he said during a conference call.

"You've made 90% of the money you're gonna make in this rally," Gundlach said, advising investors to sell on strength when the S&P 500 is above 1,000.

The S&P 500 closed at 1,033 Wednesday, leaving it up more than 50% since early March.

Gundlach, who also runs TCW's flagship Total Return Bond Fund /quotes/comstock/10r!tglmx (TGLMX 9.98, -0.01, -0.10%) , had spotted cracks that subprime mortgages were forming in the financial system by June 2007 and was among the first to warn that an era of easy money would come to a bad end. See full story on Gundlach's warning.

His new concern is the massive debt being accumulated by the U.S. government as it tries to stimulate an economy that's been mired in the worst recession since the World War II.

"We're basically borrowing money and calling it economic growth," he said on Wednesday. "It's not real economic activity."

Debt-fueled government stimulus, such as the "cash for clunkers" program, may keep the U.S. economy growing for one or two years, but then growth will probably "just die," Gundlach said.

Cash for clunkers, in which the government gave up to $4,500 to new car buyers if they handed in old gas-guzzling vehicles, illustrates another of Gundlach's concerns, that of deflation.

"Deflation is so strong that you can't even sell cars unless you slash prices 20% through government subsidies," he said.

Gundlach is similarly bearish on credit markets and commodity prices, arguing that "a turning point is close at hand in these markets."

One of the few areas he's bullish on is the U.S. dollar -- but not for good reasons.

Gundlach sees such large debt defaults in coming years that he thinks the trend will cut the supply of dollars, pushing up the currency's value.

"We're standing on the edge of a major default wave," he said. "Defaults are the elimination of dollars. You could eliminate so much actual wealth that this could be the source of a strong dollar rally."

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SPDR Gold Trust holdings flat at 1,077.63 tonnes 10 Sep 2009 07:16

TOKYO, Sept 10 (Reuters) - The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>, said its holdings stood at 1,077.63 tonnes as of Sept. 9, unchanged from the previous day.

For details on the gold holdings of the ETF listed in New York and co-listed on other exchanges, click on:

http://www.exchangetradedgold.com/iframes/usa.php

The holdings of the trust, which issues securities backed by physical stocks of gold, have declined in recent months due to fading worries about inflation, which has sapped investors' appetite for bullion as a hedge. <XAUEXT-NYS-TT>

Following are changes in SPDR holdings;

Date: Total tonnes

Sept 4 1,077.63

Sept 3 1,078,01

Sept 2 1,063.36

Aug 25 1,061.83

Aug 21 1,066.41

Aug 11 1,065.49

Aug 10 1,068.55

Aug 7 1,068.90

July 29 1,072.87

July 28 1,083.25

July 22 1,086.61

July 21 1,092.41

July 17 1,094.54

July 16 1,094.85

July 14 1,094.54

July 8 1,109.81

July 6 1,120.19

June 30 1,120.55

June 25 1,125.74

June 22 1,131.24

June 5 1,132.15

June 3 1,132.50

June 1 1,134.03 -- record

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FACTBOX-How to invest into gold and key price drivers 08 Sep 2009 09:32

Sept 8 (Reuters) - U.S. gold futures hit $1,000 an ounce for the first time since February as the dollar's weakness, concerns about the sustainability of global economic recovery and worries about future inflation underpinned sentiment. Following are key facts about the market and different ways to invest in the precious metal. HOW DO I INVEST? SPOT MARKET Large buyers and institutional investors generally buy the metal from big banks. London is the hub of the global spot gold market, with some $18 billion in trades passing through London's clearing system each day. To avoid cost and security risks, bullion is not usually physically moved and deals are cleared through paper transfers. Other significant markets for physical gold are India, China, the Middle East, Singapore, Turkey, Italy and the United States. FUTURES MARKETS Investors can also enter the market via futures exchanges, where people trade in contracts to buy or sell a particular commodity at a fixed price on a certain future date. The COMEX division of the New York Mercantile Exchange is the world's largest gold futures market in terms of trading volume. The Tokyo Commodity exchange, popularly known as TOCOM, is the most important futures market in Asia. China launched its first gold futures contract on January 9, 2008. Several other countries, including India, Dubai and Turkey, have also launched futures exchanges. EXCHANGE-TRADED FUNDS The wider media coverage of high gold prices has also attracted investments into exchange-traded funds (ETFs), which issue securities backed by physical metal and allow people to gain exposure to the underlying gold prices without taking delivery of the metal itself. Gold held in New York's SPDR Gold Trust <GLD> <XAUEXT-NYS-TT>, the world's largest gold-backed ETF, rose to a record high of 1,127.68 tonnes on April. The ETF's holdings are equivalent to nearly half global annual mine supply, and are worth some $34 billion at today's prices. Other gold ETFs include iShares COMEX Gold Trust <IAU>, ETF Securities' Gold Bullion Securities <GBSx.L> and ETFS Physical Gold <PHAU.L>, and Zurich Cantonal Bank's Physical Gold <ZGLD.S>. BARS AND COINS Retail investors can buy gold from metals traders selling bars and coins in specialist shops or on the Internet. They pay a small premium for investment products, of between 5-20 percent above spot price depending on the size of the product and the weight of demand. KEY PRICE DRIVERS: INVESTORS Rising interest in commodities, including gold, from investment funds in recent years has been a major factor behind bullion's rally to historic highs. Gold's strong performance in recent years has attracted more players and increased inflows of money into the overall market. U.S. DOLLAR The currency market plays a major role in setting the direction of gold, with bullion prices moving in the opposite direction to the U.S. dollar. Gold is a popular hedge against currency weakness. A weak U.S. currency also makes dollar-priced gold cheaper for holders of other currencies and vice versa. OIL PRICES Gold has historicaLly had a strong correlation with crude oil prices, as the metal can be used as a hedge against oil-led inflation. Strength in crude prices also boosts interest in commodities as an asset class. POLITICAL TENSIONS The precious metal is widely considered a "safe-haven", bought in a flight to quality during uncertain times. Major geo-political events including bomb blasts, terror attacks and assassinations can induce price rises. Financial market shocks, which cause other asset prices to drop sharply, can have a similar effect. CENTRAL BANK GOLD RESERVES Central banks hold gold as part of their reserves. Buying or selling of the metal by the banks can influence prices. In March 2004, 15 European central banks renewed a 1999 pact to limit their gold sales over a five-year period to 2,500 tonnes, with annual sales limited to 500 tonnes, up from 2,000 tonnes in the first agreement. Sales under the pact have been relatively low in recent years, however. In 2007-2008 the signatories of the pact sold only 358 out of a possible 500 tonnes, and sales this year have reached only 144 tonnes so far this year, according to the latest figures available from the World Gold Council. A third Central Bank Gold Agreement was announced in August, which limits the signatories' sales to 400 tonnes a year. HEDGING Several years ago when gold prices were languishing around $300 an ounce, gold producers sold a part of their expected output with a promise to deliver the metal at a future date. But when prices started rising, they suffered losses and there was a move to buyback their hedging positions to fully gain from higher market prices -- a practice known as de-hedging. Significant producer de-hedging can boost market sentiment and support gold prices. SUPPLY/DEMAND Supply and demand fundamentals generally do not play a big role in determining gold prices because of huge above-ground stocks, now estimated at around 158,000 tonnes -- more than 60 times annual mine production. Gold is not consumed like other commodities. Peak buying seasons in major consuming countries such as India and China exert some influence on the market, but others factors such as the dollar and oil prices carry more weight. (Compiled by Atul Prakash and Jan Harvey; editing by Ben Tan) ((ben.tan@thomsonreuters.com; +65 6870 3923; Reuters Messaging: ben.tan.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: MARKETS GOLD/INVESTMENT

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Hong Kong IPO Pipeline - Sept 7 07 Sep 2009 14:03

     HONG KONG, Sept 7 (Reuters) - The following are some of the 
major companies planning initial public offerings on the Hong 
Kong stock exchange. 
    Please contact Fion Li at (+852) 2843-6936 to submit entries 
for this diary. 
    Click on the square bracket for the latest story. 
    * Denotes new entry or update 
    ** A- and H-shares combined 
=============================================================== 
DEBUT  COMPANY            SHRS   PRICE     MANAGERS    PROCEEDS 
DATE                     (MLN)  (HK$/SHR)              (US$MLN) 
=============================================================== 
*Sept Sinopharm         545.68  12.25-16  CICC, UBS      1,130 
23    Holdings                          Morgan Stanley 
      [ID:nHKG284282]                 Citigroup, Deutsche 
--------------------------------------------------------------- 
*Sept China Metallurgical 2610  6.16-6.81  Morgan Stanley 4,000** 
24    Group             A 3500  5-5.42 yuan  CICC, Citigroup, 
      [ID:nHKG225209]                     Citic Securities 
      [ID:nSHA30547] 
      (A-share listing in Shanghai on Sept 21) 
--------------------------------------------------------------- 
*Sept China Lilang        300     3.2-4  Bofa Merrill Lynch 155 
25    Ltd                                   HSBC 
      [ID:nHKG225209] 
--------------------------------------------------------------- 
*Sept Yingde Gases        N.A.    N.A.      Morgan Staley   300 
2009  [ID:nHKG155161]                          Goldman 
      [ID:nHKG54140] 
--------------------------------------------------------------- 
Sept  China South         N.A.    N.A.     Merrill Lynch,   513 
2009  City Holdings                           BOCI 
      [ID:nHKG232386] 
--------------------------------------------------------------- 
OCT   China Vanadium      N.A.    N.A.       Citigroup      200 
2009  Titano Magnetite 
      Mining Co Ltd 
      [ID:nHKG218674] 
--------------------------------------------------------------- 
OCT   China SCE           N.A.    N.A.   Deutsche Bank,     400 
2009  Property Holdings                  Morgan Stanley 
      [ID:nHKG320663] 
--------------------------------------------------------------- 
Q4    Wynn Macau          N.A.    N.A.  JPMorgan, UBS 500-1,000 
2009  <WYNN.O>                         Morgan Stanley 
      [ID:nSP478097] 
--------------------------------------------------------------- 
Q4    Lung Ming           N.A.    N.A.                500-1,000 
2009  [ID:nHKG44842] 
--------------------------------------------------------------- 
Q4    Longyuan            N.A.    N.A.    Morgan Stanley    700 
2009  Electric 
      [ID:nHKG185111] 
--------------------------------------------------------------- 
*H2   Las Vegas           N.A.    N.A.    Goldman   1,500-2,000 
2009  Sands' <LVS.N> 
      Macau assets 
      [ID:nN02534339] 
      [ID:nSIN441766] 
--------------------------------------------------------------- 
2009  Fantasia Group      N.A.   N.A.      UBS, Goldman     500 
      [ID:nHKG164817] 
--------------------------------------------------------------- 
End   Evergrande Real     N.A.    N.A.     CS, Goldman    1,500 
2009  Estate Group                        Merrill Lynch 
      [ID:nHKG164817] 
--------------------------------------------------------------- 
End   China Minsheng      3,320   N.A      UBS, BOCI      2,930 
2009  Banking Corp 
      <600016.SS> 
      [ID:nnSEO13647] 
--------------------------------------------------------------- 
End   Sany Heavy          N.A.    N.A.       HSBC           200 
2009  Equipment Co 
      [ID:nHKG259152] 
--------------------------------------------------------------- 
End   Trinity             N.A.    N.A.     JP Morgan,       200 
2009  [ID:nHKG129890]                      Citigroup 
--------------------------------------------------------------- 
2009  China Pacific       N.A.    N.A.        CICC        3,500 
/2010 Insurance (Group)                     CS, UBS 
      Ltd <601601.SS>                       Goldman 
      [ID:nSHA309267] 
--------------------------------------------------------------- 
2009/ Powerlong Group     N.A.    N.A.    UBS, Goldman      230 
2010  [ID:nHKG168099] 
--------------------------------------------------------------- 
2009  Glorious Property   N.A.   N.A.    UBS, JP Morgan   1,000 
/2010 Holdings                            Deutsche Bank 
      [ID:nHKG164817] 
--------------------------------------------------------------- 
Q1    AIA <AIG.N>         N.A.    N.A.    Morgan Stanley  4,000 
2010  [ID:nHKG20632]                      Deutsche Bank 
--------------------------------------------------------------- 
2010  Wilmar              N.A.   N.A. BOCI, Goldman 3,000-4,000 
      International's                  Morgan Stanley 
      <WLIL.SI> China unit 
      [ID:nHKG120371] 
--------------------------------------------------------------- 
*2010 Xinjiang Goldwind  242-278  N.A.                    1,000 
      Science & Technology 
      <002202.SZ> 
      [ID:nSHA150131] 
-------------------------------------------------------------

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SPDR Gold Trust holdings rise 1.4 pct to 1,078.01 T 04 Sep 2009 06:58

TOKYO, Sept 4 (Reuters) - The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>, said holdings stood at 1,078.01 tonnes as of Sept 3, up 14.65 tonnes or 1.4 percent from the previous business day.

For details on the gold holdings of the ETF listed in New York and co-listed on other exchanges, click on:

http://www.exchangetradedgold.com/iframes/usa.php

Holdings in the trust, which issues securities backed by physical stocks of gold, have declined in the past months due to fading worries about inflation, which has sapped investors' appetite for bullion as a hedge. <XAUEXT-NYS-TT>

Following are changes in SPDR holdings;

Date: Total tonnes

Sept 3 1,078,01

Sept 2 1,063.36

Aug 25 1,061.83

Aug 21 1,066.41

Aug 11 1,065.49

Aug 10 1,068.55

Aug 7 1,068.90

July 29 1,072.87

July 28 1,083.25

July 22 1,086.61

July 21 1,092.41

July 17 1,094.54

July 16 1,094.85

July 14 1,094.54

July 8 1,109.81

July 6 1,120.19

June 30 1,120.55

June 25 1,125.74

June 22 1,131.24

June 5 1,132.15

June 3 1,132.50

June 1 1,134.03 -- record

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INTERVIEW-China's Xinri says sales up 20 pct, eyes 2011 IPO 03 Sep 2009 15:16

* Expects sales to grow 20 pct this year

* Eyes a Shenzhen IPO in 2011

* To sell 5 million units in 2013

By Michael Wei and Kirby Chien

BEIJING, Sept 3 (Reuters) - Chinese electric bicycle maker Jiangsu Xinri E-Vehicle Co Ltd expects its sales to grow nearly 20 percent this year, and is aiming for a public offering in 2011.

Although consumer spending has slowed, Xinri's sales would likely rise to 1.9 million units this year from 1.6 million in 2008, because of an increase in popularity of the electric vehicles, its deputy general manager, Gavin Hu, told Reuters.

"The electric bicycle, which is energy-efficient, environmentally friendly and economical, has been gaining popularity everywhere, especially in China," Hu said in an interview.

Xinri, which posted sales of 3 billion yuan ($439.2 million) in 2008, also exports to Canada, Japan and other countries in Asia and Europe.

In order to meet a growing demand for the relatively new vehicle, Xinri, which purchases batteries from BYD Co Ltd <1211.HK>, is planning to build two more plants to further boost production.

"The target we set ourselves is to sell 5 million units in 2013," Hu said.

The company, founded in 1999, now has more than 3,000 employees and operates two plants, in Wuxi and Tianjin, with over 5,000 shops across the country.

More than 1,000 companies compete in China's highly fragmented electric bicycle industry. Total sales of the electric vehicles rose to 21 million in China last year, according to data from an industry group, China Bicycle Association.

The Wuxi, Jiangsu-based firm has met representatives from more than 40 investment banks to discuss its potential initial public offering (IPO) in the Small and Medium Enterprise Board in Shenzhen, Hu said.

"There is a higher premium in the SME board as people generally consider that smaller firms enjoy stronger growth potential," he said.

Hu declined to give a figure on the size of the share offering, only saying it is still under negotiation.

"If there is a need, we will consider an IPO on a large scale," he said. ($1=6.830 Yuan) (Reporting by Michael Wei and Kirby Chien; Editing by Ken Wills)

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TIMELINE-Major China resources deals so far this year 01 Sep 2009 11:02

Sept 1 (Reuters) - PetroChina <PTR.N> <0857.HK> is set to pay C$1.9 billion ($1.7 billion) for a 60 percent stake in two planned Canadian oil sands projects, China's biggest investment yet in one of the world's largest untapped oil regions.

The following TIMELINE shows some Chinese investments in overseas commodities and energy sectors this year:

Feb 5, 2009 - Shenzhen Zhongjin Lingnan Nonfemet <000060.SZ>, China's third-largest zinc producer, wins Australian government approval to acquire a controlling stake in zinc miner Perilya <PEM.AX>.

Feb 24 - Chinese steel mill Hunan Valin Iron and Steel says it will pay $770 million for a 16.5 percent stake in Fortescue Metals Group <FMG.AX>.

April 1 - Australian zinc miner OZ Minerals <OZL.AX> agrees to sell most of its assets to Minmetals for $1.21 billion.

April 24 - China National Petroleum Corp, China's biggest oil company, says it agrees with Kazakh state's KazMunaiGas to jointly buy a Kazakh oil producer for $3.3 billion. [ID:nPEK332461]

May 1 - CNMC agrees to take a majority stake in Australian rare earths miner Lynas Corp <LYC.AX> for $185.7 million. [ID:nSYD454967]

May 24 - Asia's largest oil and gas producer PetroChina <0857.HK> agrees to buy Keppel Corp's <KPLM.SI> 45.5 percent stake in Singapore Petroleum Co for $1 billion. [ID:nSHA475591]

June 6 - China's state-owned Nonferrous Metal Mining Corp (CNMC) pledges to invest $400 million in Zambia's Luanshya Copper Mines (LCM) after formally taking over running the mines. [ID:nL6314236]

June 9 - Canadian mining and exploration company Consolidated Thompson <CLM.TO> finalises a deal for China's Wuhan Iron and Steel Corp to invest $240 million. [ID:nN30324499]

June 23 - Chinese power company GCL-Poly Energy Holdings <3800.HK> says it will pay $3.38 billion for a Jiangsu province solar parts maker to tap the growing solar energy industry. [ID:nHKG124144]

June 24 - Sinopec, China's largest oil refiner, agrees to buy Swiss oil explorer Addax Petroleum Corp <AXC.TO> for $7.24 billion, gaining access to high-potential oil blocks in West Africa and Iraq. [ID:nBNG477261]

July 3 - Canada's Teck Resources <TCKb.TO> <TCK.N> will sell a 17.2 percent equity stake to state-owned China Investment Corp through a private placement that will raise $1.5 billion and help the miner pay down debt. [ID:nN03153079]

Aug 13 - Yanzhou Coal Mining Co <1171.HK> agrees to buy Australian coal miner Felix Resources Ltd <FLX.AX> for $2.9 billion. [ID:nSYD362329]

Aug 31 - PetroChina <PTR.N> <0857.HK> is set to pay C$1.9 billion ($1.7 billion) for a 60 percent stake in two planned Canadian oil sands projects -- MacKay River and Dover -- owned by Canada's Athabasca Oil Sands Corp (AOSC). [ID:nN31233511]

Source: Reuters

See also:

FACTBOX-China's top-10 overseas resource deals [ID:nSP486599]

FACTBOX-China invests in Australia resources [ID:nSP390487]

TIMELINE-China oil majors look overseas [ID:nSP335638]

(Reporting by Euan Rocha and Jijo Jacob; Editing by Gillian Murdoch and Ben Tan)

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UPDATE 2-China's BYD says Buffett wants to raise stake 31 Aug 2009 17:01

* BYD expects to sell electric car in US in 2010

* BYD keen on mainland A-share listing, maybe in the next yr

* Multinational automakers in talks to buy BYD batteries

* Shares close up 8 pct in weak HK market

(Adds details and analyst comments)

By Joanne Chiu

HONG KONG, Aug 31 (Reuters) - U.S. billionaire Warren Buffett intends to raise his stake in Chinese electric car and battery maker BYD Co Ltd <1211.HK>, BYD's chairman said on Monday, sending shares in his company up 8 percent.

MidAmerican Energy Holdings, a unit of Buffett's Berkshire Hathaway <BRKa.N>, bought 10 percent of BYD for $230 million or about HK$8 a share last September, sparking a massive rally in the stock. [ID:nN26317503]

"MidAmerican has always intended to raise its stake in BYD because it believes BYD has good prospects in the development of renewable energy, but we are still considering (whether to sell more)," BYD Chairman Wang Chuanfu told reporters on Monday.

BYD, Hong Kong's largest listed auto stock, also said it expects to sell its e6 electric car in the United States in 2010, a year ahead of schedule.

"BYD shares are not cheap at the current price level, but since the company's strategy is in line with Beijing's policy, and with the support of Buffett, the market is willing to pay a premium for that," said Ben Kwong, the chief operating officer of KGI Asia.

China's government has been encouraging local automakers to focus on more fuel efficient models and environmentally friendly technologies.

BYD shares rose 8 percent to close at HK$48.6 on Monday, more than six times what MidAmerican paid and valuing the company at about $13 billion. The benchmark Hang Seng index <.HSI> fell 1.9 percent.

AMBITIOUS PLANS

BYD has ambitious plans for its hybrid and rechargeable electric vehicles, aiming to sell as many as 9 million units by 2025 to take on heavyweights like General Motors [GM.UL] and Toyota Motor Corp <7203.T>.

It launched a gasoline-electric hybrid electric car, F3DM, in China last year and expects to sell its all-electric car e6 to the United States in 2010, a year earlier than its original 2011 target. BYD says the e6 is capable of driving 400 kilometres (249 miles) on a single charge.

"e6 will be launched in the United States by the end of 2010 and they are now being tested under U.S. regulations," Wang said.

The electric cars will be sold in Shenzhen first in the fourth quarter of 2009 and will gradually expand to other cities in China, he added.

BYD has sold about 100 F3DM cars to governments and corporates and plans to sell to individual customers starting in September.

It sold a total of 180,000 vehicles in the first half of the year, up 1.5 times from a year ago, which helped nearly double its net profit to 1.18 billion yuan ($173 million) for Jan-June.

BYD said it now hopes to exceed its 2009 sales target of 400,000 vehicles.

For result statement, please click http://www.hkexnews.hk/listedco/listconews/sehk/20090830/LTN20090830046.pdf

CHINA LISTING

BYD is keen on a stock market listing in mainland China and may look to do so in the next year, Wang said.

The company has previously said it planned to issue up to 100 million A shares on the Shenzhen stock exchange to raise capital for development projects [ID:nHKG366024].

The issue could be worth HK$4.6 billion ($594 million) based on its share price on Monday.

BYD, which began life as a maker of rechargeable batteries in Shenzhen in 1995, is in talks to sell its batteries to multinational car makers including Volkswagen <VOWG.DE>.

"Batteries are our core products and we are willing to supply them to companies in the same industry," Wang said. ($1=HK$7.751=6.830 yuan)

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Roubini sees 'big risk' of double-dip recession: report

Business Times - 24 Aug 2009

NEW YORK - Nouriel Roubini, one of the few economists who accurately predicted the magnitude of the world's recent financial troubles, sees a 'big risk' of a double-dip recession, according to an opinion piece posted on the Financial Times' website on Sunday.

Prof Roubini, a professor at New York University's Stern School of Business, said it appears the global economy will bottom out in the second half of this year, and that US and western European economies will likely experience 'anaemic' and 'below trend' growth for at least a couple of years.

Yet he warned that policymakers face a 'damned if they do and damned if they don't' conundrum in trying to unwind their massive fiscal and monetary stimuli to keep the global economy from toppling into a depression.

He said that if policymakers try to fight rising budget deficits by raising taxes and cutting spending, they could undermine any recovery.

On the other hand, he said if they maintain large deficits, worries about excessive inflation will grow, causing bond yields and borrowing rates to rise and perhaps choking off economic growth.

Prof Roubini said another reason to worry is that energy, food and oil prices are rising faster than fundamentals warrant, and could be driven higher by speculation or if excessive liquidity creates artificially high demand.

He said the global economy 'could not withstand another contractionary shock' if speculation drives oil rapidly towards US$100 per barrel. US crude oil futures traded on Friday at about US$73.83.

Prof Roubini said the anaemic growth he expects would follow a couple of quarters of rapid growth, as inventories and production levels recover from near-depression levels. -- REUTERS

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