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TODAY'S BRIEFS
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Banking
& Finance
Santander, CCB
to set up rural banking
business
Spanish lender Banco Santander
(STD.NYSE, BNC.LSE,
SANT.Euronext, SAN.BMAD,
SANT.BIT) has agreed to take a
19.9% stake in a joint venture
with China Construction Bank
(CCB; 601939.SH, 0939.HK) which
will set up “village and town
banks,” the Wall
Street Journal
reported. Both parties will
invest an initial US$534 million
in the business, pending
regulatory approval. Rural
banking has traditionally been
neglected in China but has
become a priority for the
government as part of efforts to
redress the income imbalance
between urban and rural areas.
Several foreign banks have
entered the market, including
HSBC (HBC.NYSE, HSBA.LSE,
HSB.Euronext, 0005.HK) and
Standard Chartered (STAN.LSE,
2888.HK, STAN.NSE). Temasek, an
investment arm of the Singapore
government, and Bank of China
(601988.SH, 3988.HK) have also
announced plans to set up a
rural banking joint venture.
Separately, CCB reported a 26%
jump in net income to US$20.5
billion for 2010. This was
broadly in line with Bank of
China, which revealed profits of
US$15.9 billion, up 29%
year-on-year.
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Energy &
Environment
Sinopec looks
for ways to counterbalance
falling refining profits
China Petroleum & Chemical
Corp (Sinopec; SNP.NYSE,
SNP.LSE, 600028.SH, 0386.HK)
plans to cut costs and
accelerate overseas expansion as
it struggles with government
restrictions preventing it
passing on higher crude oil
prices to customers, Bloomberg
reported. The company saw its
2010 net profit rise 14% to
US$11 billion, well short of the
85% and 35% growth posted by
China National Offshore Oil Corp
(CNOOC; CEO.NYSE, 0883.HK) and
China National Petroleum Corp
(PetroChina; PTR.NYSE,
601857.SH, 0857.HK), both of
which have less exposure to
refining. Sinopec’s refining
profit fell 13% as its crude oil
expenditure rose 51%. The
government raised fuel prices
five times in 2010 – each time
by less than 5% – and reduced
them once, while average crude
oil prices increased 28%
year-on-year in New York.
Sinopec first ventured overseas
in March of last year, paying
its state-owned parent US$2.5
billion for oil assets Angola,
and is looking for further
opportunities to reduce
dependence on domestic fuel
sales.
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Tech, Media
& Telecom
Baidu develops
web browser to rival
Microsoft, Google
Baidu (BIDU.NASDAQ), which runs
China’s most popular internet
search engine, saw its stock
reach record levels on Friday
after the company confirmed that
it is testing web browsing
software for personal computers,
Bloomberg
reported. Shares rose 1.1% to
reach US$134.92, the highest
closing price on record. Baidu’s
move into web browsing would put
it in direct competition with
Microsoft (MSFT.NASDAQ) and
Google (GOOG.NASDAQ), which
offer Internet Explorer and
Chrome respectively. Kaiser Kuo,
a spokesman for the company,
said the desktop browser is
being tested internally and
dovetails with “box-computing”
technology currently under
development. He refused to
comment on earlier reports that
Baidu is working on a “light
operating system” for mobile
devices. Chinese internet stocks
performed well last week after
Google said that its email
services were being blocked by
the government. Sina
(SINA.NASDAQ) surged 17% while
NetEase (NTES.NASDAQ) and Sohu
(SOHU.NASDAQ) gained 7.2% and
6.2% respectively.
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Tech, Media
& Telecom
IMAX aims to
open 75 new screens through
China joint venture
IMAX Corp (IMAX.NYSE, IMAX.TSX)
will partner with local firm
Wanda Cinema Line to open 75 new
screens in China by 2014, the Wall
Street Journal
reported. There are currently 35
IMAX screens in the country and
a further 55 in development. The
company last month said it
wanted to have 300 screens in
Greater China within five years,
a threefold increase on
previously stated targets. Wanda
Cinema runs 70 cinemas in China
with around 600 screens. Richard
Gelfond, CEO of IMAX, sees
particular opportunities in 3-D
movies. Avatar was
China’s top-grossing film last
year, with US$213 million in
ticket sales and seven
domestically produced 3-D films
are set for release in 2011, up
from two the previous year.
Overall, Chinese box office
receipts came to US$1.55 billion
last year, up 60% from 2010.
IMAX accounted for about 3% of
these revenues with Wanda Cinema
taking 15%, according to
EntGroup, a Beijing-based media
research firm.
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Transport
& Logistics
Chinese port
rejects Japanese ship over
radiation concerns
China declined to harbor a
Japanese ship after “abnormal”
amounts of radiation were
detected on the deck and surface
containers, Bloomberg
reported. The MOL Presence had
passed within 124 kilometers of
Fukushima prefecture, site of
the crippled Daiichi nuclear
power station, and arrived in
Xiamen on March 21 before being
asked to depart. Concerns about
radiation have disrupted
shipping from Japan, with the
country’s coast guard advising
vessels to keep at least 30 km
from the affected area, and many
foreign ports scanning cargos.
China’s General Administration
of Quality Supervision,
Inspection and Quarantine has
also banned imports
of dairy products, fruit,
vegetables, seafood and other
“water products” from five areas
near to Fukushima prefecture.
Separately, two Japanese
travelers who arrived in the
country from Tokyo were
quarantined after authorities
detected above-normal radiation
levels.
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Energy &
Environment
Battery plant
manager arrested over lead
poisoning
The general manager of a battery
plant in Zhejiang province was
detained on Friday after lead
emissions poisoned 168
villagers, including 53
children, Reuters
reported. Three government
officials, including the deputy
chief of the district’s
environmental protection office,
were suspended for failing to
provide adequate supervision.
Production at the plant in
Shangtao village, near Taizhou
city has been halted until the
pollution problem is remedied.
Villagers have been advised to
avoid eating food grown in the
area as the lead has likely
contaminated groundwater. This
is the latest in a recent spate
of heavy metal pollution cases
in China. In January, more than
200 children in another eastern
province were poisoned by lead
from battery plants located too
close to homes.
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