Stocks fall for second day dragged by property shares

Chinese mainland stocks closed lower for a second day on Tuesday, dragged mainly by weak property and cement shares. The benchmark Shanghai Composite Index dropped 1.6 percent, or 38.64 points, to end at 2,382.91, while the Shenzhen Component Index fell 2.5 percent, or 244.98 points, to 9,550.93. Combined turnover on the two bourses increased slightly to 204.34 billion yuan ($32.53 billion) from 201 billion yuan in the previous day's trading. Losers outnumbered gainers by 790 to 167 in Shanghai and by 1,265 to 258 in Shenzhen.

Iron ore likely to drop as prices near 16-month highs

Iron ore prices are likely to fall in the next two months as they near their highest level since October 2011, discouraging buyers in China, according to Mark Pervan, Australia & New Zealand Banking Group Ltd's head of commodity research. He said prices may decline $5-10 a ton to the "high $140s". "At about $155, we think there's slightly more downside risk." Iron ore has surged 81 percent from a three-year low in September to $157.20 a dry ton as China's growth accelerated and port inventories dropped to the lowest level in more than three years.

Bonds fall as central bank drains funds from system

China's government bonds fell after the central bank drained funds from the financial system for the first time in eight months. The People's Bank of China conducted 30 billion yuan ($4.8 billion) of 28-day repurchase agreements on Tuesday and didn't offer any reverse contracts that add cash to the money market, according to a statement. The contracts were offered at a yield of 2.75 percent, unchanged from the previous sale of similar-maturity securities on June 19. "The central bank is probably worried that there is too much money in the banking system," said Wang Huane, a senior trader at Qilu Bank Co in Jinan, the capital of Shandong province.

Property assets 'should remain private'

China should maintain restrictions on public access to property records, the People's Daily newspaper said in a front-page commentary on Tuesday, calling real estate assets a "personal issue". However, the government should impose stricter requirements for public officials to register their properties, the newspaper said. Anti-corruption officials should work harder at discovering the hidden assets of public servants, it said.

Infiniti profitable in 3-4 years, Nissan predicts

Nissan Motor Co expects its luxury Infiniti business to become profitable in three to four years as it begins production in China and introduces entry-level vehicles to attract customers. Infiniti, which last year relocated its headquarters to Hong Kong from Japan, plans to start building cars in China in the third quarter of 2014 and for global sales this year to rise at least 10 percent to about 200,000 units, President Johan de Nysschen told Bloomberg. "We really have been a US-centric brand. The future has got to be for us to look at China," he said.

Finland's Metso buys Quzhou machinery foundry

Finnish engineering giant Metso Oyj has strengthened its presence in China with the acquisition, for an undisclosed amount, of the manganese steel foundry owned by Quzhou Juxin Machinery Co Ltd in Zhejiang province. The transaction covers the acquisition of Juxin's assets as well as Quzhou Chixin Machinery Co Ltd, which will be transferred to Metso along with the jobs of 275 workers. The transaction is expected to be completed within six months.

Fixed-asset investment in railways surges in January

China's railway industry saw a significant rise in fixed asset and infrastructure investment during January. Data from the Ministry of Railways showed fixed-asset investment worth 20.99 billion yuan ($3.36 billion) was agreed, up 70.9 percent on the same period last year, while infrastructure investment rose 62.3 percent to 14.18 billion yuan from a year earlier. Railway fixed-asset investment generally includes infrastructure investment, updating and alteration of facilities, and buying locomotives.

China Daily - Agencies

(China Daily 02/20/2013 page14)