7-7-08

Indian stocks closed in the green Monday as inflation concerns eased following a sharp drop in crude oil prices. However, despite the positive close, the Sensex Index wasn’t able to hold onto earlier gains that took the Index to a high of 13,793.39. Traders said Indian shares were sold off after rumors broke that the Samajwadi Party, which is close to joining the ruling United Progressive Alliance (UPA), is demanding that the government initiate a windfall tax on private oil companies.

“The market should bottom around 12,800. It should trade range-bound between 13,200 and 12,800. Right now, it is a considerably strong bottom. For that to breakdown, we will need some really substantial negative news,” said Amit Dalal of Amit Nalin Securities.

The Bombay Stock Exchange's Sensex Index rose 72 points, or 0.5%, to 13,525.99. Here's a look at how some India-based American depositary shares traded in the U.S. on Monday.

In a note to clients today, Morgan Stanley analyst Anil Agarwal said ICICI Bank (IBN) and HDFC Bank (HDB) may see further share-price losses over the next year as earnings growth slows. “They continue to be among the most expensive banks globally. If current inflation and interest rate scenarios and capital market conditions persist, earnings may disappoint meaningfully,” he said. American depositary shares of ICICI Bank, which trade on the NYSE, moved up 2.6% to $27.85 and American depositary shares of HDFC Bank finished essentially flat at $71.30.

Satyam Computer Services (SAY), an Indian consulting and IT service provider, announced it has entered into a partnership with Tyfone, a global provider of mobile financial services, infrastructure and fully-integrated mobile payments capabilities. Under the partnership, the companies will collaborate to help clients gain an edge when competing in the mobile services sector. Satyam will leverage its deep domain expertise and system integration experience with Tyfone’s full mobile financial services infrastructure to provide clients with enhanced solutions and technology. Shares of Satyam surged 5% to $25.87.

According to the Economic Times, Indian information technology leader Infosys Technologies (INFY) will invest in Australia’s IT services sector with a commitment of AUD$1.9 million in cash and services for the newly created Smart Services Cooperative Research Center (CRC). The investment will help to develop an R&D program with the goal of creating intellectual property for Australia’s finance, media and government sectors. Shares of Infosys added 10 cents to $42.70.

Some big gainers among Indian ADRs Monday were Tata Communications (TCL), which soared 9.2% to $17.69 and Patni Computer Systems (PTI), which ripped higher by 7.9% to $11.06.

Be sure to check out the Far East Portfolio at Stockpickr.com every night to find out which stocks in India and China are making big moves and announcing major news.

China Recap

Stocks in Hong Kong and mainland China rebounded Monday, after buying interest picked up on speculation that the G8 will push a strong U.S. dollar policy this week when the Group of Eight meets in Japan. Investors in the Far East are hoping the G8 will support the dollar which in turn will help to cool off rising oil prices and tame out-of-control inflation for the leading emerging markets. Market observers in the region also added that traders were snapping up Chinese shares in anticipation of a government bailout ahead of the Olympics.

“Investors believe that the government intends to create a stable environment for the stock market in the run-up to the Olympics,” said Zhang Gang, an analyst with Central China Securities.

The Shanghai Composite Index traded up 122.51 points, or 4.59%, to 2,792.40 and Hong Kong’s Hang Seng Index soared 489.24, or 2.28%, to 21,913.06. Here's a look at how some China-based American depositary shares traded in the U.S. on Monday.

According to Bloomberg, China’s largest producer of metal Aluminum Corporation of China (ACH) has stopped production at a joint venture in the northern province of Shanxi after the government ordered smelters to cut output in order to save power for local farmers. In a report issued to clients today, RBS Sempra analyst John Kemp said, “The power outage in Shanxi is extremely bullish for aluminum prices in the near term. It suggests China’s power shortages will not be confined to the southern and eastern regions and that power problems could start to affect aluminum and industrial output across the country as a whole.” American depository shares of Aluminum Corporation, which trade on the NYSE, moved higher by 3.5% to $27.97.

Huaneng Power International (HNP), China’s largest public power company, announced it has increased tariffs at its coal-fired power plants by an average of 5.16%, effective from July 1, 2008. The tariff increase comes as a response to the National Development and Reform Commission’s notice to adjust the on-grid tariffs of the power plants in the power grids of North China, South China, Central China, East China, Northeast China and Northwest China to help ease production problems, ensure the power supply and to promote energy saving. Shares of Huaneng Power added 1.7% $25.98.

The9 Limited (NCTY), a Chinese online gaming company, announced it has entered into a joint venture with Korea-based online game developer T3 Entertainment to develop and publish online games. The9 Limited said the partnership will bring the companies together for the development of Audition 2 along with other games in the Audition game series. The companies also plan to develop new high-quality online games for international markets. Shares of The9 jumped 4.3% to $24.52.

Chinese operator of digital media networks AirMedia Group (AMCN) announced two strategic acquisitions today as the company moves to expand its advertising business to gate bridges in airports. AirMedia said it has inked a deal to buy Excel Lead International for $27.7 million in cash and around 765,475 American Depositary Shares or up to $40.3 million in cash only. Also, the company said it agreed to acquire an 80% stake in Flying Dragon Media Advertising for around $1.5 million in cash. These acquisitions will allow AirMedia to obtain the contractual rights to place advertisements on gate bridges in 10 major airports in China. Shares of AirMedia finished down 4 cents to $14.

Chinese solar stocks were in play Monday following news that Canadian Solar (CSIQ) has landed five new sales agreements in the Czech Republic and in Italy. Shares of Solarfun Power (SOLF) climbed 7.7% to $14.79; Trina Solar (TSL), moved up 4.5% to $30.32; China Sunergy (CSUN), jumped 3.4% to $7.42; LDK Solar (LDK), added 2.2% to $32.26; and ReneSola (SOL), finished up 1% to $13.30.

Be sure to check out the Far East Portfolio at Stockpickr.com every night to find out which stocks in India and China are making big moves and announcing major news.