China Day Ahead: Rio May Sell Shares After Axing Chinalco Deal

June 5 (Bloomberg) -- Rio Tinto Group, the world’s third- largest mining company, is considering a plan to raise as much as $15 billion in a stock sale after rejecting an investment from Aluminum Corp. of China, two people involved in the talks said. Industrial & Commercial Bank of China Ltd.’s plan to buy control of Bank of East Asia Ltd.’s Ontario-based unit may be the first step toward further expansion in Canada, said analyst John Aiken. The Beijing-based ICBC yesterday said it would pay C$80.3 million ($72 million) for 70 percent of Bank of East Asia Ltd.’s Canada unit. The following are some of the important stories that overnight, and newspaper summaries in China today: TOP OVERNIGHT STORIES: U.S. May Not Join Climate Pact Without China Pledge, Kerry Says The U.S. is unlikely to agree to global treaty on climate change unless China, now the world’s biggest emitter of greenhouse gases, makes a meaningful commitment to a worldwide solution, said Senator John Kerry, chairman of the Foreign Relations Committee. “The message is clear: America is no more likely to enter into a legally binding global solution in 2009 than it was back in the 1990s when we debated Kyoto unless China is part of the solution,” Kerry, a Massachusetts Democrat, said at a hearing. Air France Crash Probe Finds ‘Incoherent’ Data on Jet’s Speed The investigation into the June 1 Air France crash that claimed 228 lives found irregularities in the speed measurements transmitted by the Airbus A330 plane in its last minutes. Three days into the probe, the only established facts are the presence of strong equatorial wind phenomena at the time of the crash and the “incoherence of the different speed measurements,” France’s air accident investigation bureau said in an e-mailed statement. TOP MARKET STORIES: Stocks in U.S. Gain, Led by Banks on Analyst Upgrades U.S. stocks rose for a fifth time in six days as analysts recommended buying bank shares and higher oil prices boosted energy producers, outweighing a slump in retailers following disappointing May sales. The Standard & Poor’s 500 Index climbed 1.2 percent to 942.46 at 4:17 p.m. in New York. The benchmark measure for U.S. equities has rallied 39 percent from a 12-year low on March 9 on optimism the global recession is slowing. The Dow Jones Industrial Average rose 74.96 points, or 0.9 percent, to 8,750.24. The Nasdaq Composite Index added 1.3 percent to 1,850.02. FTSE 100 Is Little Changed; Rio Tinto Sinks, RBS Gain U.K. stocks fluctuated as a sell-off in mining companies offset a rebound in banks and real estate companies after an unexpected jump in British house prices. The FTSE 100 Index declined 7.64, or 0.2 percent, to 4,375.78 at 2:13 p.m. in London, having swung between gains and losses at least five times. The FTSE All-Share Index fell 0.2 percent, while Ireland’s ISEQ Index was little changed. Gold Rises as Speculation Slumping Dollar to Spur Inflation Gold prices rose on speculation that the slumping dollar will spur inflation, boosting the appeal of precious metals as a hedge. Platinum surged more than $55 an ounce to the highest since September. Gold futures for August delivery rose $16.70, or 1.7 percent, to $982.30 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, the price reached $992.10, the highest for a most-active contract since Feb. 24. Wheat Rises as Rain Delays Spring-Crop Planting in U.S. Plains Wheat rose for the first time in three days as rain in the northern U.S. Great Plains delays spring-crop planting and on speculation that yesterday’s decline went too far. Wheat futures for July delivery climbed 17.75 cents, or 2.9 percent, to $6.3525 a bushel on the Chicago Board of Trade. In May, the price jumped 19 percent on speculation that adverse weather will curb U.S. output. TOP CHINA STORIES OVERNIGHT: Hong Kong’s Tiananmen Vigil Draws as Many as 150,000 People Hong Kong’s annual vigil to mark the 1989 Tiananmen Square military crackdown attracted an estimated record 150,000 people as China maintained its position that the government handled the incident correctly. Crowds, holding banners and singing, flooded into Victoria Park in the former British colony to protest China’s refusal to reconsider its opinion on the 20th anniversary of the crackdown. The Hong Kong Alliance in Support of Patriotic Democratic Movements of China, which organized the event, had earlier predicted a turnout of as much as 90,000. ICBC to Buy 70% of Bank of East Asia Canada Industrial & Commercial Bank of China Ltd., the world’s largest by market value, agreed to buy a 70 percent stake in Bank of East Asia Ltd.’s Canadian unit for about C$80.3 million ($72 million) as it accelerates expansion overseas. Industrial & Commercial Bank, also known as ICBC, has an option to raise its holding to 80 percent a year after completing the transaction, the Beijing-based company said in a statement to the Hong Kong stock exchange. Bank of East Asia, the third-largest lender in Hong Kong by assets, will hold the balance of the unit. China Resources Power to Raise HK$5.92 Billion for Investment China Resources Power Holding the third-largest Hong Kong- listed mainland electricity plans to raise HK$5.92 billion ($764 million) to develop reserves, renewable energy plants and more efficient coal power stations in China. The company will sell between 423.8 million and 432 shares at HK$14 each on the basis of one rights share for 10 existing shares, according to a statement to Hong Kong exchange. Controlling shareholder, China Resources (Holdings) Co., will underwrite the sale and take up its subscription rights, the filing said. China Plans to Buy $2.2 Billion of Goods From Taiwan Lenovo Group and Haier Electronics Group Co. are among 40 Chinese companies that agreed to buy about $2.2 billion worth of goods from Taiwan, the island’s trade council said. The mainland companies will purchase $827 million of products by the end of July and the remaining $1.4 billion over the coming year, the Taiwan External Trade Development Council said in a statement. Lenovo is China’s biggest maker of personal computers, while Haier Electronics is a Hong Kong-listed unit of China’s largest maker of home appliances. Russia’s Belon Exports Coking Coal to China as Demand Recover OAO Belon, a coal producer part-owned by Russia’s third- largest steelmaker, started exports to China this quarter after demand for coking coal recovered. Novosibirsk-based Belon signed a contract with China to supply as much as 40,000 metric tons of coking coal a month, Chief Executive Officer Andrey Dobrov said in an interview. Dobrov owns 41 percent of Belon, and OAO Magnitogorsk Iron & Steel the same. China Sells 9,440 Tons of Reserve Cotton in Ninth Auction China, the world’s biggest cotton producer and user, sold 9,440 metric tons (43,358 bales) of the fiber from its reserves, or 39 percent of what was offered, data compiled by Cottonchina.org shows. The government put 24,447 tons up for bid in the ninth auction of its reserves, industry watcher Cottonchina said in a report posted on its Web site. Supplies were sold for an average price of 12,618 yuan a ton, or 83.76 cents a pound, do 0.1 percent from the previous day.