Chinese energy producers soar after record snows, Asian banks dip

In Asia Thursday, China's Shanghai Composite Index rose 0.5% to 3,321. In Hong Kong and Tokyo, the major indexes fell with the Hang Seng shedding 0.9% to close at 22,643 and the Nikkei losing 1.3% to end the day at 9,549.

In China, shares in energy producers surged as the country plowed itself out from under heavy snow and the national Heating Office was forced to turn household heating on a full two weeks before the normally scheduled date due to extremely low temperatures. The added demand for fuel and electricity sent shares of Changchun Gas and Shaan Xi Provincial Natural Gas soaring to the 10 percent daily limit for a second day in a row. Huaneng Power International (HUNWF) rose 1.8% and oil producing giant PetroChina (PTR) rose 1.1%.
The November storms have produced the most snow the country has had in 50 years, and was amplified by a move from the Beijing Weather Modification Office, which seeded clouds in order to produce precipitation at the beginning of the month, adding 16 million metric tons of additional snow, according to the Xinhua news agency. Cloud seeding is a technique the Chinese use to force rain to fall. It helps clear the smog from the air and encourages rainfall during droughts. The technique was used extensively before the Beijing Olympics in an effort to improve air quality.

Perhaps the heavy snows were auspicious for Hong Kong-listed China Resources Enterprise, which is the partner of SABMiller and produces China's best-selling Snow beer. The company reported a 55% rise in third-quarter profits today, prompting 3.6% rise in its stock price. The company also has interests in food processing and supermarkets, but claims that its beer division's profits have increased 58% this quarter. So far this year, the company's stock has shot up 89%.

In Hong Kong, banking shares slid on fears that the upcoming IPO of China Minsheng Banking Corp. will entice investors, leaving more expensive stocks in the dust. Today China Construction Bank (CICHF) dropped 2.5%, Bank of China (BACHF) slumped 2.1% and HSBC (HBC) lost 1%.

In Tokyo, banking stocks also floundered as Japan's biggest banks hatched plans to sell more of their common stock in order to raise capital and rescue their balance sheets. Mizuho Financial Group (MFG) tumbled 6.6%, Nomura Holdings (NMR) sank 4.9%, Sumitomo Mitsui (SMFJY) lost 4.6 and Mitsubishi UFJ (MTU) retreated 3.7%.

Of the very few gainers on the Nikkei, Mitsubishi Rayon (MRYNF) cast a ray of hope on the beleaguered Japanese exchange. The chemical and fabric maker soared by 30% on the news that Mitsubishi Chemical Holdings (MTLHF) will buy it for $2.4 billion. The two companies split from each other nearly 60 years ago, according to Bloomberg, and the merger will allow Mitsubishi Chemical to expand into new areas. Mitsubishi Chemical shares fell 5.2% today, but if the move proves to be a smart one, gains may follow soon, perhaps helping to lift the Nikkei out of its current slump.

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