Monday, October 08, 2007

Coal.com ..... / China

Wow! Does anybody need another example that it is never about valuations and it´s all about liquidity. The longer this run continues and the real interest rate for deposits in China is negative the more unlikely the following outcome will be like this........

Was für Fakten! Hier wird einmal mehr bestätigt das es an den Märkte in den wenigsten Fällen um die Bewertung geht. Die Liquidität dominiert fast immer das Geschehen. Je länger dieser Lauf weitergeht und die Regierung immer noch negative Sparzinsen zuläßt desto unwahrscheinlicher wird wohl folgendes Motto.......

China Shenhua Energy Shares Surge in Shanghai Debut
Oct. 9 (Bloomberg) -- China Shenhua Energy Co., the nation's biggest coal producer, almost doubled on its first day of trading in Shanghai after investors applied for a record 2.66 trillion yuan ($354 billion) of stock.

Shenhua rose as much as 91 percent after the Beijing-based company raised 66.6 billion yuan in the world's biggest share sale this year. Investors ordered 40 times the stock on offer, drawn by first-day trading gains for Chinese companies that averaged 269 percent in the past three months.

The surge gives the coal producer a market capitalization of $173 billion, surpassing Cia. Vale do Rio Doce as the world's second-biggest mining company. Shenhua will use the proceeds to buy mines and expand output to meet demand in the world's fastest-growing major economy, where coal prices have jumped to a record.

Thanks to Bespoke

The Beijing-based company sold 66.6 billion yuan of shares at 36.99 yuan apiece, a 19 percent discount to the closing price of its Hong Kong-listed stock yesterday.

Debut Gains
Shenhua's Shanghai shares are trading at 65 times estimated earnings. China Coal Energy Co., the nation's second-biggest coal producer, is trading in Hong Kong at 52 times last year earnings. Shenhua's Hong Kong shares are trading at a ratio of 42, less than the 54 times average for China's CSI 300 Index, the world's best-performing this year.

Shenhua sold 1.8 billion yuan-denominated shares. The sale surpassed the $8 billion raised by Russia's VTB Group in May. The amount is also a record for a domestic stock offering, exceeding the 58 billion yuan raised by China Construction Bank. .....

China, the largest miner and consumer of coal, became a net importer of the fuel for the first time in January, ending centuries of self-sufficiency and boosting benchmark prices of the fuel at home and at Australia's Newcastle Port to records in August. China burns coal to generate 78 percent of its electricity.

>For a more bullish view on the Chinese Economy (not the stock market) read How fit is the panda? from the Economist. Once in a month i need to post something positive excluding gold....... :-)

> Für einen eher positiven Ausblick für China´s Wirtschaft (nicht den Aktienmarkt) empfiehlt sich How fit is the panda? vom Economist. Ich muß ja zumindest einmal monatlich etwas bullishes ausserhalb von Gold posten...... :-)

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8 Comments:

Blogger jmf said...


U.S. Stock Market Stumble Presaged by S&P 500 Options


Investors are paying the most ever to protect against a drop in the Standard & Poor's 500 Index, data compiled by Morgan Stanley show. The gap between the price of so-called put options on the benchmark for U.S. equity and the cost to wager on further gains has averaged about 8 percentage points since August. That's more than the previous high in July 2001, before the index dropped 34 percent and fell to the lowest this decade.

12:29 AM  
Blogger jmf said...

Brad Setser


Will Polish plumbers give way to the China price?

12:50 AM  
Blogger jmf said...

Chinese take landmark stake in US bank

China Minsheng Banking Corp is set to become the first Chinese mainland institution to invest in a US bank after striking a deal to acquire 9.9 per cent of San Francisco-based UCBH Holdings for more than $200m. The deal is the first overseas investment by Minsheng and is expected to herald a string of similar deals over the next few months as cash-rich Chinese companies seek to expand their global footprint. Lex says the Minsheng deal “ticks all the right boxes”.

12:57 AM  
Blogger jmf said...


Kloeckner shares slump 19%, profit to miss forecasts


Shares in German metal storage and distribution firm Kloeckner & Co plunged 19.2% in Frankfurt on Tuesday. The firm warned that, due to lower stainless steel prices it expects fiscal-year earnings before interest, tax, depreciation and amortization to fall below last year's 395 million euro profit by around 10%, missing forecasts. "While the volumes in Europe and North America remained satisfactory, Kloeckner experienced increasing pressure on the gross margins in the distribution of steel products during the third quarter," the firm said.

5:22 AM  
Blogger Edgar said...

The China Syndrome will end if the peasant population rises up and is slaughtered by the regime, or if there is a nasty trade war with the U.S.. Both are possible at the same time, IMO.

6:14 AM  
Blogger Yogi said...

One of my neighbours is speculating in Chinese telecom and REIT stocks.

I sent him some articles on just how export dependent and potentially unstable the Chinese economy is, but he wouldn't listen so there's no use sending him a link to your blog :)

Hellasious has a good discussion on China in his Sudden Debt blog today. He thinks they will be forced to float the Yuan or take some other drastic action soon. I will be watching the Yen and other Asian currencies to see if they rise in sympathy with the Yuan.

8:33 AM  
Blogger jmf said...

Moin Edgar,

i´ve also heard some stories about the "frustration" from lots of rural people....

Some still forget that it is still very dangerous to have a different opinion than the government....

I´ve have recently seen a very sad documentary about people sent to jail just for raising their voice about some environmental issues...

Moin Yogi,

they have to do something. It is a farce that the yuan has lost 40% against the € during the past few years.

Congratulations to your neighbour.

I´m glad & proud that i never shorted this market.....

But it is getting harder month by month to stay away.... :-)

9:03 AM  
Blogger Edgar said...

Hi jmf,

Yep, they are going to sicken half the country some day. The rural people are the poorest too. Same thing in the U.S.. The maggots in south Manhattan get the money first, us inland folks get it never. The dollar should say: "In Goldman Sachs We Trust", because that is who really sets monetary policy. They own the fed, the dollar, the gubbermint. Sickening.

11:30 AM  

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