FACTBOX-Ways of looking at the oil price 25 Feb 2010 13:41

Feb 25 (Reuters) - Investment bankers, oil executives, 
analysts and officials kick off from Thursday discussions on 
factors affecting oil prices, at a two-day workshop in Tokyo 
organised by the International Energy Agency (IEA) and several 
Japanese agencies. 
    The global economic recovery and the winding down of 
government stimulus programmes are among the biggest tests for 
the oil market, which experts will weigh at the meeting. 
    The debate over how speculation and fundamentals affect oil 
prices continues to rumble, although it is less intense now that 
crude <CLc1> has largely traded in a $70-$80 range since October, 
versus the record high near $150 a barrel in July 2008. 
[ID:nSGE61N012] 
    One reason for oil keeping its strength -- after falling 
towards $30 in December 2008 -- has been a decision by the 
Organization of the Petroleum Exporting Countries to keep its cut 
of 4.2 million barrels per day (bpd) in production since 
September 2008. 
    However, OPEC's compliance with the target has fallen from 
historic highs of around 80 percent to around 60 percent now as 
the oil price has steadied. OPEC next meets in Vienna on March 17 
to reconsider policy. 
     
    MARGINAL COST 
    The marginal cost is how much producers have to pay to 
extract more difficult oil, such as from the oil sands in Canada. 
    In line with the Saudi assessment of the marginal cost, 
Iran's OPEC governor Mohammad Ali Khatibi said some high-cost oil 
projects cost $70-$80 a barrel and if the price of oil continued 
to fall, investors would withdraw from them. 
    Many projects have already been postponed. 
    London-based analysts Bernstein also put the marginal cost at 
around $75-$80 a barrel for oil. 
    Increasingly, the cost of producing biofuels and nuclear 
energy has also been taken into consideration. 
    A study by the Nuclear Energy Agency and the International 
Energy Agency published in 2005 found nuclear energy was 
competitive when oil cost $40-$45 a barrel. 
    Since then oil prices and electricity costs have risen 
strongly and analysts estimated nuclear power was competitive 
when oil was at $70 a barrel. 
     
    OPERATING COST 
    The cost of operating fields once they are already onstream 
has been estimated to be around $50 a barrel. 
     
    BUDGET ASSUMPTIONS 
    Oil-producing nations have historically assumed very 
conservative prices for a barrel of oil when setting budgets, 
allowing for some slack in their spending should prices fall. 
    The price of oil averaged nearly $100 in 2008 and averaged 
around $62 in 2009. 
    Data from Washington-based PFC Energy last year showed Saudi 
Arabia needing oil prices to average $51 a barrel to break even, 
compared with $43 a barrel in 2008. 
     
    OIL COMPANY ASSUMPTIONS 
    Like oil-producing countries, international oil companies 
also make price assumptions that underpin their production 
sharing contracts with governments around the world and are used 
when assessing projects. 
    Total <TOTF.PA> has said it based its projects on oil at $80 
a barrel. BP'S <BP.L> oil price assumption is between $60 and $90 
a barrel. 
     
    FAIR VALUE 
    Fair value is a notional price taking into account only 
supply and demand, cutting out any speculative element. 
    It ignores factors such as the danger of conflict in 
oil-producing nations, currency effects and fund flows in and out 
of oil. 
    Estimates of what is the fair value of oil abound, but some 
players have said a fair price would be closer to $75 a barrel. 
    OPEC ministers in the past repeatedly said prices were 
inflated by speculation and that the price slide from a record 
hit in July 2008 in part reflected the departure of speculators. 
     
    INFLATION-ADJUSTED 
    In inflation-adjusted terms, the July 2008's record price was 
well above the previous record high of $105.95 set in April 1980, 
after the Iranian Revolution in 1979. 
    That level was first breached in March 2008, according to the 
International Energy Agency (IEA). It bases its calculation on 
monthly prompt U.S. crude and U.S. consumer price data as U.S. 
futures trade did not exist in 1980. 
     
    BENCHMARK 
    The price of U.S. light sweet crude is a benchmark used for 
pricing other crudes. North Sea Brent futures <LCOc1> are the 
other main international marker. 
    The most expensive crudes in the world, notably Nigeria's 
Pennington or Malaysian Tapis, command a premium to the 
benchmarks as they have low sulphur content, making them easy to 
refine to produce high yields of gasoline and other light fuels. 
    At the other end of the scale, heavy Iranian crudes Soroush 
and Norouz are sold at steep discounts to Brent crude. 
    To see a TABLE on the oil price OPEC members need please 
click on [ID:nLDE5BG18P] 
 (Compiled by Barbara Lewis, Simon Webb and Tokyo Energy Desk; 
Editing by Ramthan Hussain) 
 ((barbara.lewis@reuters.com +44 20 7542 2637; Reuters Messaging: 
barbara.lewis.reuters.com@reuters.net)) 
  
 

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FACTBOX-The top 10 country holders of gold reserves 18 Feb 2010 14:54

 SINGAPORE, Feb 18 (Reuters) - The International Monetary Fund 
on Wednesday said it would shortly begin selling 191.3 tonnes of 
gold in the open market under a program approved last year to 
boost its resources for lending. [ID:nSGE61H00R] 
    The open-market sales are a part of a programme launched last 
year and, until now, gold has been made available to central 
banks on a first-come-first-serve basis.  
    So far, India -- the world's biggest consumer of gold -- 
Mauritius and Sri Lanka have purchased a total of 212 tonnes of 
gold from the IMF. 
    The IMF announced last year it would sell 403.3 tonnes of 
gold, about one-eighth of its total stock, to diversify its 
sources of income and increase low-cost lending to poor.     
    For a graphic of gold as a percentage of total reserves for 
the top holders by country, see: 
   http://graphics.thomsonreuters.com/0210/GLD_TPHLD0210.gif 
    The 10 countries with the highest levels of gold holdings by 
December 2009 (in tonnes): 
     
               Dec 2009    March 2009      % of reserves 
All countries   26,780.0      26,349.4         10.2 
United States    8,133.5       8,133.5         68.7 
Germany          3,407.6       3,412.6         64.6 
Italy            2,451.8       2,451.8         63.4 
France           2,435.4       2,487.1         64.2 
China            1,054.0       1,054.0          1.5 
Switzerland      1,040.1       1,040.1         28.8 
Japan              765.2         765.2          2.4 
Netherlands        612.5         612.5         51.7 
Russia             607.7         523.7          4.7 
India              557.7         357.7          6.4 
     
 The percentage of reserves is as calculated by the World Gold 
Council. The value of gold holdings is calculated using the 
end-October gold price of $1,040 per troy ounce. 

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FACTBOX-Hedging instruments used by AsiaPac airlines 10 Feb 2010 18:00

Feb 10 (Reuters) - Asia's largest airlines that fly 
international routes, such as Singapore Airlines <SIAL.SI>, 
Cathay Pacific <0293.HK> and Qantas <QAN.AX>, hedge their fuel 
requirements, but most still do not. 
    Those who do have rigid safeguards, such as limiting the 
volumes hedged each time and maintaining a tight deadline for 
risk managers to do so, mainly to protect against unauthorised 
speculation. 
    SIA, for example, has a policy of requiring risk managers to 
put in place a hedge position within five days, sources said. 
    Airlines use a variety of instruments to hedge their 
exposures, such as Over-The-Counter Swaps, Futures and Options, 
on jet fuel, gas oil (diesel) or crude oil swaps and futures. 
    For related analysis click on: [ID:nSGE60I04Q] 
    For related factbox on JAL's hedging losses, click on: 
    [ID:nSGE60U01U] 
     
    * OPTIONS 
    - One of the most commonly used instruments is the Option, 
which gives users the right, but not the obligation, to buy fuel 
at a pre-determined future price. It provids protection against 
prices rising to unmanageable levels, at a relatively low cost. 
    Most airlines, who are natural buyers of options, do so at a 
pre-determined price, known as a Call option, at a cost called a 
premium, which is a fraction of the actual contract price. 
    The reverse, that is to sell a contract at a pre-determined 
price, is called a Put Option. 
    If prices hit or cross the pre-determined level, airlines 
will activate the option to buy fuel at that price, regardless of 
how much higher prices rise. The counterparty, normally a bank, 
will pay the difference between the strike price and the market 
price at the time. 
    - SIA said it has hedged 22 percent of its fuel consumption, 
or about 3.5 million barrels of jet fuel, at an average of $100 a 
barrel versus current prompt jet swap price of $75.00-$85.00. 
    - Some airlines prefer the more sophisticated "Zero-Cost" 
option, in which they need not pay the Option premium as long as 
the contract stays within a pre-determined price range. 
    In this case, the airline buys a Call Option at a certain 
premium and sell a Put option at the same premium value. 
    As long as prices stay within range of their Put and Call, 
they do not incur any cost on the Option, making it an attractive 
hedging tool. 
    If prices rise above the Call, the buyer is "in-the-money" 
and makes the price difference and the price of the premium from 
the counterparty.  
    If prices for below the put, the reverse is true, that is, 
the buyer will have to pay the premium and make up the difference 
in price to the bank. 
    - However, most banks impose a "Knock-in, Knock-out" clause, 
where they pre-determine a certain loss ceiling and after which 
they can exit the contract. 
    But the same does not apply to the airlines and they would 
have to either ride a money-losing contract till expiry or sell 
it at a loss. 
    "The Zero-Cost option looks attractive but, in reality, it 
provides only limited insurance and has unlimited risk," said 
Clarence Chu, a trader with Hudson Capital. 
    - When the market was volatile in second-half 2008, most 
airlines lost money on physical jet fuel cargoes versus the 
relatively thin volumes that they hedged when crude benchmarks 
were on the way up to above $140. 
    When prices dived to below $40, they were unprotected on 
downside of their Zero-Cost Options. 
    Worse, some kept doubling their exposures down by buying more 
Zero-Cost options at lower price ranges, hoping to mitigate 
earlier losses, as prices spiral downwards.  
    But they end up incurring more losses as crude continue its 
freefall all the way to below $40.. 
    "There is no such thing as free money and the banks are not 
there to make money for you," an industry source said. 
     
    * SWAPS/FUTURES 
    - The other option for airlines is to hedge by buying 
Outright forward crude, or jet fuel swaps or futures.  
    This locks in their fuel exposures at a fixed price, in which 
they usually take the contract to expiry and settling the 
difference between the contract price and the month-average cash 
levels as at the expiry date. 
    - However, the settlement typically involves larger sums of 
upfront cash and liquidity in the jet fuel market can sometimes 
be quite thin. 
    "The main drawback on hedging directly on swaps is that it 
requires more upfront capital because you are dealing with the 
entire outright price of the contract, unlike options where you 
are dealing with a premium cost," another trader said. 
    "For an airline with large volumes, the amount of capital 
required would be huge and quite undesirable." 
    - Some airlines, particularly more sophisticated Western 
carriers, conduct their own hedging with the open market on both 
swaps and options. 
    None in Asia currently do so on the perception that they 
could be speculating. Other hindrances are cost and logistics 
constraints such as building credit ties with counterparties 
other than banks, such as physical traders, and incurring 
exchange fees and maintaining trading margins. 
 (Reporting by Yaw Yan Chong; Editing by Ramthan Hussain) 
 ((yanchong.yaw@thomsonreuters.com; +65 6870 3851; Reuters 
Messaging: yanchong.yaw.reuters.com@reuters.net)) 
 ((If you have a query or comment on this story, send an email to 
news.feedback.asia@thomsonreuters.com)) 
Keywords: AIRLINES HEDGING/ASIA TOO

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China's tightening may end with yuan hike

Business Times - 22 Jan 2010 COMMENTARY
China's tightening may end with yuan hike

And it could come without warning this year if Beijing's preferred gradualist approach doesn't cool the red-hot economy

By VIKRAM KHANNA

IN RECENT days, Chinese policymakers have stepped up their efforts to cool China's high-flying economy. But what we have seen so far could be only the beginning; there are likely to be more policy moves - including, possibly, some dramatic ones.

While there is debate about whether China's economy is in bubble mode, few are in any doubt that it is overheating (neither are China's policymakers themselves). There are many reasons for this, some unique to China, some not.

Together with other Asian economies, China has been one of the key targets of what economist Nouriel Roubini calls 'the mother of all carry trades'. The carry trade is the phenomenon of speculators borrowing at a low interest rate and deploying the funds in higher-yielding assets, or currencies. They then enjoy the yield difference, or 'carry'. Whereas the yen was the favourite borrowing currency pre-financial crisis, the US dollar has now taken its place.

China has pegged its currency to the US dollar (at about 6.8 yuan to the dollar since July 2008) partly to help its exporters in the face of the global crisis. But this peg means that China has to import America's monetary policy and keep interest rates very low. If it tries to raise them, this would suck in more capital, thus making it harder to rein in domestic money growth. In order to prevent the yuan from rising in the face of huge capital inflows, China's central bank has had to intervene in the forex market on a heroic scale, buying dollars and selling yuan.

In the process, last year alone, China added about US$450 billion to its reserves, which by year-end stood at close to a whopping US$2.4 trillion.

The counterpart of the reserve build-up has been the amount of money pumped into the domestic economy. Broad money growth in the last two months of 2009 was close to 30 per cent year-on-year - well above the official target of 17 per cent.

Bank lending has added to the problem. Last year, China's banks lent a record 9.6 trillion yuan (US$1.4 trillion or S$2 trillion), one third more than in the previous year. Part of this was to finance China's 4 trillion yuan fiscal stimulus package. But a lot of lending has eventually found its way into asset markets - mainly stocks and properties. The Chinese stock market jumped around 80 per cent last year. Property sales rose more than 75 per cent in 2009, while apartment prices in Shanghai and Beijing soared 50-60 per cent.

Dangerous

China is not well placed to be running such a loose monetary policy. Whereas the United States went through a severe credit crunch in 2009 and housing sector problems which warranted low interest rates, China did not. By importing America's monetary policy, China has effectively turned the yuan itself into a 'carry trade' currency domestically, enabling locals to borrow cheap in pursuit of higher yields in the asset markets.

This is dangerous. The eternal China bull Jim Rogers has acknowledged that some of China's real estate markets are in bubble territory. 'Dubai times 1,000' is how hedge fund investor James Chanos (who foresaw the collapse of Enron) characterises China's situation. While there is hyperbole in this description, there is also an element of truth.

The potential danger is that China's asset bubble will burst - and the consequences could be enormous. In essence, it will lead to massive losses for investors as well as Chinese banks, and could precipitate an asset price crash as well as currency problems across the region in an Asian crisis-style contagion.

As the property sector in China accounts for some 10 per cent of GDP and 20 per cent of total investment, the domestic consequences will be notable. Several sectors would be badly hit, including construction, steel, cement, and other capital goods industries - in which there is already overcapacity. In a snowballing effect, overall investment will drop sharply. The drop may not be short-lived: China's past investment booms have taken several years to unwind. After the overheating of the early 1990s, for example, investment declined for seven years, from 44 per cent of GDP in 1994 to 36 per cent of GDP in 2001.

As investment declines, China will be hard pressed to boost consumption suddenly. The measures needed to do this - such as strengthening social safety nets and deepening financial reforms - cannot be effective overnight. With both investment and consumption slowing, China's growth rate will take a hit, by some estimates as much as 3-4 percentage points. China's banks will see their non-performing loans soar. And while the country has the means to deal with this problem, it could be an enormously costly fiscal exercise.

With its domestic economy facing problems, China's dependence on the export sector will become even greater than it is now - at a time of weak global demand. This, coupled with the fact that hot money flows will reverse and start leaving China, will mean that the yuan will be under pressure to depreciate. As the overcapacity in China is being worked off, other Asian countries' export sectors will all be hit and currencies regionwide will also come under downward pressure, in a contagion reminiscent of the Asian crisis.

Fortunately, China's policymakers are wise to the dangers and have started to reverse some of China's pro-overheating policies. But it appears that, given their gradualist mindset, they are trying to do this in calibrated fashion.

Starting on Jan 7, the People's Bank of China (PBOC) started raising the cost of funding for lenders in the interbank market, by increasing the yields on three-month and one-year bills. From Jan 18, reserve requirements on Chinese banks were raised 50 basis points, effectively reducing their capacity to lend. This has been followed up with administrative measures to curb lending further.

Half-measures

However, these are not particularly aggressive moves; indeed, they are half-measures. For instance, administrative measures have in the past been easily circumvented - for example, by simply reclassifying projects. It is likely that more will be needed (and will be done) if China is to really start cooling down its red-hot economy.

One interesting proposal - made by, among several people, Barry Eichengreen of the University of California at Berkeley - is for China to substantially appreciate the yuan through a one-shot revaluation of 10-15 per cent. Other economists have proposed that in addition, China should let the yuan float within a fairly wide range against a basket of currencies. This would put paid to the expectations of yuan appreciation that are helping to drive capital flows into China. It would also give the PBOC more freedom to hike interest rates more aggressively to cool inflation and asset prices.

There would be some side effects; in particular, China's export sector will suffer. But experts estimate that the impact will be limited. Zhang Bin of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, which advises the Cabinet, estimates that a 10 per cent revaluation would slow growth in export sales by 3.3 per cent.

On the plus side, a Chinese revaluation will shift more resources into the domestic sector and make China's consumers richer, thus boosting domestic demand. It would accelerate China's move into higher-value industries, at least in the coastal provinces where wages are relatively higher. A yuan appreciation would also help reduce global imbalances by reducing China's trade surplus. If Asia's currencies also appreciate in the yuan's wake - a not unlikely scenario - this would further reduce global imbalances and help Asia become a more powerful engine of growth for the global economy.

As of now, China's official policy remains to keep the yuan pegged at a more or less fixed rate to the US dollar, despite external pressure for greater flexibility. Chinese policymakers will do their best to keep this policy unchanged. Their preferred approach is clearly to try and control overheating through other, more gradualist means. But if those don't work, watch for a without-warning hike of the yuan. It could happen in 2010.

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UPDATE 1-Shanda Games buys Mochi Media in deal worth $80 mln 12 Jan 2010 14:39

* Shanda buys Mochi in $60 mln cash and $20 mln equity deal

* Transaction will be Shanda Games second buy this year

SHANGHAI, Jan 12 (Reuters) - Shanda Games <GAME.O> said on Tuesday it will acquire U.S.-based online game company Mochi Media in a deal valued at $80 million, to strengthen Shanda Games' presence outside China.

The transaction, comprising $60 million in cash and $20 million in equity arrangements, is Shanda Games' second acquisition this year.

Shanda Games said on Friday it entered into an agreement to buy Shanghai-based online game developer Goldcool Games.

San Francisco-based Mochi Media runs a platform to distribute online games and has 140 million monthly active users, Shanda Games said in a statement.

"This transaction positions Shanda Games to become a truly global online game media platform," said Shanda Games Chief Executive Officer Diana Li in a statement.

China's online gaming industry grew 30.2 percent to 27.1 billion yuan ($4 billion) in 2009, according to data from research firm iResearch. [ID:nTOE60A01H]

The top game operators of 2009 by market share were Tencent Holdings <0700.HK>, Shanda Games and NetEase.com <NTES.O>.

Shanda Interactive Entertainment <SNDA.O> spun of Shanda Games in a $1 billion initial public offering last year.

The deal is expected to close in the first quarter of 2010. (Reporting by Melanie Lee; Editing by Jacqueline Wong) ((melanie.lee@thomsonreuters.com; +86 21 6104 1778; Reuters Messaging: melanie.lee.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) ($1=6.825 Yuan) Keywords: SHANDA/MOCHI

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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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