Echoes of Buffett's railroad deal are felt in China as railway stocks surge
Nov 4th 2009 7:00AM
Updated Dec 4th 2009 4:18PM
In Asia Wednesday, shares climbed with Hong Kong's Hang Seng Index advancing 1.8 percent to 21,615. Japan's Nikkei Index closed at 9,844 -- up 0.4 percent and China's Shanghai Composite ended the day at 3,129 -- up 0.5 percent.
In China, investors must have been keeping a close eye on Warren Buffett's planned purchase Tuesday of railroad company Burlington Northern Santa Fe Corp for $34 billion. Not wanting to miss out on the next big thing, investors plowed money into Daqin Railway Co., which surged 4.3 percent in Shanghai today. The company operates China's immense coal transportation network. Guangshen Railway Co. (GSH) also benefited from the Buffett effect, advancing 2.5 percent, and Railroad builder China Railway Construction Corp Ltd. (GWYCF) gained 1.5 percent.
Chinese gold companies soared as gold hit a high of $1,094.55 per ounce. Shandong Gold climbed 2.11 percent and Zijin Mining Ltd. (ZIJMF) rose 1.5 percent. Hong Kong-listed shares of Zijin Mining Ltd. (ZIJMF) spiked even higher, adding 5.7 percent, and shares in Hong Kong's Realgold Mining reaped a 3.29 percent gain.
Hong Kong investors betting on casinos in nearby glitzy Macau, were rewarded Wednesday as Galaxy Entertainment Group Ltd. (GXYEF) surged 6.6 percent, and Stanley Ho's SJM Holdings Ltd. (SJMHF) rose 6.5 percent on the news that the tiny island's gaming revenue soared in October. According to the Macau Daily Times, gaming operators took in more than MOP 1.4 billion ($175 million) this month -- a rise of 42 percent compared with last October -- despite new Chinese visa restrictions, which many thought would stymie the industry. Billionaire Steve Wynn's Wynn Macau Ltd. however, was not a great bet; it sank 0.5 percent.
In Tokyo, Japan's giant clothing retailer Fast Retailing Co. (FRCOY) gained 4.4 percent on an increase in sales at local Uniqlo outlets. The affordable but stylish clothing chain has enjoyed great success in Europe, with its London shop attracting hoards of High Street shoppers. It also opened a sleek flagship store in Paris this year. Now it's gaining even more popularity at home.
Japan Steel Works (JPSWY) was catapulted 10 percent higher. The maker of nuclear-reactor parts has employed cost cutting measures in order to raise its annual income target, according to Bloomberg.
Japanese car makers posted gains after announcing higher sales figures for October. Nissan Motors (NSANY) climbed 1.7 percent, Honda Motor Co. (HMC) added 1.4 percent Toyota Motor Corp. (TM), rose 1.1 percent. According to Market Watch, Toyota now plans to boost production for the year to 7 million units. Previously it was aiming for 6.67 million. Tuesday, Toyota also announced that U.S. sales of the Lexus rose 20 percent in October, making the picture look even more rosy for the car maker, which also racked up a 12 percent increase in Lexus sales in September, according to Bloomberg. It's no surprise that Americans seem to be heading to the car dealership at the first signs of financial recovery.