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China Shenhua Energy IPO Suffers Weak Start


Coal-mining company China Shenhua Energy limped into its first day of trading on the Hong Kong Stock Exchange, closing 2.7 percent below the initial public offering price of 96 cents.

Market analysts say many investors are worried that coal prices in China might be near their peak, so they were reluctant to buy Shenhua Energy.

Investors are more upbeat about Bank of Communications, China's fifth largest lender, which starts trading its shares in Hong Kong on Thursday. Orders for the shares totaled more than $14 billion - making it one of the most popular initial public offerings ever in the city.

Howard Gorges, vice chairman of South China Brokerage, a Hong Kong securities firm, says the bank is considered a safe investment. "There is a lot of potential for this very large bank to be run better and also to diversify from being a corporate-oriented bank towards a retail-oriented bank with credit cards, wealth management and other services," he said.

China's auto industry suffered a 57 percent fall in profit for the first four months of the year, taking in 12 billion yuan, in large part because of slumping car sales.

The country's leading automaker, First Automotive Works, warned its profit could fall more than 50 percent for the first half of this year, because of higher costs and slower sales.

In an effort to boost the tourism sector, Indonesia now will allow tourists from 13 more countries to buy visas on arrival. These countries include China, India, Saudi Arabia and Russia. The addition of the new countries means that holders of passports issued by 34 governments can now buy an entry visa on arrival.

The permanent secretary for the Indonesia Culture and Tourism Board, Sapta Nirwamdar, says the country is counting on six million travelers this year. "We hope we can achieve that number and, of course, this is very important for the economy of Indonesia."

Tourism is a huge revenue generator for Indonesia. Visitor arrivals, however, fell after the 2002 bombing of a Bali nightclub and again following last December's tsunami.

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