Hong Kong close 1.74% lower on profit-taking

Special Report:
Global Financial Crisis

HONG KONG, May 11 (Xinhua) -- Hong Kong stocks shed 301.92 points, or 1.74
percent to close at 17,087.95 at the end of Monday trading, as investors rushed
to take profit gained during the seven-day rally starting on April 30.

The benchmark Hang Seng Index opened slightly lower at 17,381 and advanced
to the day high of 17,685.64 before moving downward to the day low of 17,032.44.
The market retrieved some ground upon closing.

Market turnover expanded to 92.13 billion HK dollars (11.90 billion U.S.
dollars), from Friday's 86.77 billion HK dollars (11.21 billion U.S. dollars).

Analysts say the market could face further consolidation as economic
fundamentals are not good enough to support the current market level.

Aside from profit-taking, the Hong Kong market was thought to be dragged
down by China's mainland bourses, which moved into negative territory after days
of considerable gains.

The Chinese government said the country's main inflation index fell 1.5
percent year-on-year in April, a result much better than anticipated.

However, the good news seemed unable to lend any momentum to the retreating
stock market, with the Shanghai Composite down 1.8 percent and the Shenzhen
Component Index down 3.09 percent.

Heavyweight HSBC gained 0.3 percent to 66.1 HK dollars, among other
constituents that defied the down trend.

China Mobile dropped 1.2 percent to 75.3 HK dollars and another telecom
service provider China Unicom rose 0.11 percent to 9.25 HK dollars.

Shoe maker Yue Yuen plunged 7.2 percent to 16.07 HK dollars after news that
the company would be kicked out of the Hang Seng Index and replaced by
electricity producer China Resources Power Holdings on June 8.

Financial stocks fell cross the board. China's biggest lender ICBC slid 1.9
percent to 4.71 HK dollars, Bank of China lost 2.37 percent to 2.88 HK dollars
and Bank of Construction fell 6.7 percent on concerns Bank of America will sell
shares in the company.

The property sector was also down. Henderson Land 5.2 percent to 37.6 HK
dollars, Cheung Kong down 1.8 percent and New World Development down 2.1.

Utilities stocks failed to buckle the market fall, with HK Electric down
0.71 percent and MTR Corporation down 5.37 percent. (7.7420 HK dollars = 1 US
dollar)

Canton Fair receives less orders, sign of trouble ahead

Special
Report: Global Financial Crisis

GUANGZHOU, May 7 (Xinhua) -- China's leading trade
fair, known as Canton Fair, ended Thursday with export orders down almost 17
percent, a sign of troubles ahead for China's exporters amid the financial
crisis, organizers said.

The export agreements for more than 20,000 Chinese
companies reached 26 billion U.S. dollars at the 105th China Import and Export
from April 15 to May 7, down 16.9 percent compared to the previous fair last
October, said the fair's organizers.

"Statistics show that China's export will continue to
decline in the next two quarters," said Wen Zhongliang, director of the Business
Office of the fair and deputy director of the Department of Foreign Trade,
Ministry of Commerce.

"It may get better in the fourth quarter," Wen said.

The Canton Fair, with a history of 52 years, opened
with the world's close attention amid the global downturn as a barometer for
China's import and export situation.

Fair sales showed that China's economic situation is
still grim despite of the "positive signs", Wen said.

"The financial crisis had hit the real economy and
its impact on consumer demands still continues," Wen said.

Mechanical and electrical product deals, which
account for half of China's exports in money terms, reached 11.3 billion U.S.
dollars, down 19.5 percent. Textile deals was 1.6 billion dollars, down 15
percent, and the daily commodities down 2.4 percent.

The "positive changes" in textile industry in March
was a temporary and partial change, which should not lead to over-optimism for
the industry, said Wang Yu, vice president of China Chamber of Commerce for
Import and Export of Textiles.

"The orders are still decreasing, which is a great
challenge for China's 40,000 textile companies," Wang told Xinhua.

More than 165,000 oversea buyers attended the fair,
down 5.1 percent from the previous fair.

"Many old customers decreased or even canceled their
purchasing plan this time," said Du Yanhua, manager of Shanghai Flying Horse
Import and Export Group Ltd..

Many Chinese companies said their export agreements
are becoming "shorter" and "smaller". "My company's export to a Spanish company
was reduced to 200,000 from one million dollars and the delivery time was
shortened to two months from three months," said a sales manger of Aux Group
Company Ltd..

Although Europe and America are still the major
markets for China, the deals are down 28 percent and eight percent respectively
compared to the previous fair while agreements increased in new markets, said Mu
Xinhai, fair spokesman.

China's exports to Argentina, India and the
Association of Southeast Asian Nations rose 10, six and seven percent
respectively, Mu said.

"Chinese companies are trying to explore new markets
while old ones are shrinking," Mu said.

More companies also turned to the domestic market.
Two domestic trade sub-fairs were held during the Canton Fair. Deals volume
exceeded 460 million yuan (about 67.6 million yuan) at one of the fairs, Mu
said.

Confidence could be seen at the fair amid the
downturn. Some companies said the most severe time had ended.

"Our business has become more stable compared to last
November and December, which gives us more confidence to counter the crisis,"
said Cao Xiaojian, general manager of Jiangsu Sainty International Group
Cooperation Ltd..

Companies which survived the crisis had improved
themselves and reinforced their competitiveness, Wen Zhongliang said.

"With the recovery of the world's economy, Chinese
companies have the confidence to be more competitive in the international
market," Wen said.

Dairy scandal casts lasting shadow
over China's food exports

GUANGZHOU, May 7 (Xinhua) -- Visitors were scarce at the Guangdong Dongtai Dairy Products booth during the third phase of the 105th China Import and Export Fair, also called the Canton Fair.

The third phase of China's largest trade event began
here Sunday and ended Thursday. Full story

Brazil's mining giant reports $1.36 bln earning in Q1

RIO DE JANEIRO, May 6 (Xinhua) -- Brazil's mining giant Companhia Vale do
Rio Doce (Vale) reported on late Wednesday a net earning of 1.4 billion U.S.
dollars in the first quarter of 2009, equal to 0.26 U.S. dollars per share on a
fully diluted basis.

The earning is roughly the same with the one registered in the fourth
quarter of 2008, but falling 32.6 percent from the same period last year.

Vale, the country's largest private company and the world's leading iron
ore producer, said that it is focusing on financial and operational flexibility
amid the economic turmoil, seeking to maximize efficiency and minimize costs.

Since the turmoil started, Vale has been suffering with the sharp reduction
in the demand for iron ore and other minerals, which led to falls in both sale
revenues and volume, and also led to the shutdown of several mines.

The company's operational profit, as measured by adjusted EBIT (earnings
before interest and taxes), fell to 1.68 billion U.S. dollars in the first
quarter of 2009, down 16.3 percent from the fourth quarter of 2008 and 42.2
percent from the first quarter of last year.

The operational margin was of 31.6 percent, up 27.7 percent from the fourth
quarter of 2008 but down 37.2 percent from a year ago.

The cash generation, as measured by EBITDA (earnings before interest,
taxes, depreciation and amortization), was of 2.28 billion U.S. dollars, down
15.4 percent from the fourth quarter of2008 and 38.8 percent from the first
quarter last year.

Gross revenues fell to 5.4 billion U.S. dollars, down 27.2 percent from the
fourth quarter of 2008 and 32.6 percent from the first quarter of 2008.

Investments, excluding acquisitions, fell to 1.7 billion U.S. dollars,
roughly the same amount registered in the same period last year, but down 50.5
percent from the fourth quarter of 2008.

Vale's first quarter iron ore output down 37%

Special Report:Global Financial Crisis

RIO DE JANEIRO, April 28 (Xinhua) -- Brazil's mining giant Companhia Vale
do Rio Doce (Vale) announced on Tuesday that its iron ore output totaled 46.86
million metric tons in the first quarter of 2009, down 37.1 percent from the
same period last year.

Vale's iron ore output fell 25.9 percent compared to the last quarter of
2008, which already saw a substantial decrease of production.

Vale, the largest iron ore producer in the world, stated that it had been
facing "unprecedented weak demand conditions" caused by sharp decrease of global
industrial production, which was an effect of the international financial
crisis.

In order to reduce costs and adjust production to the decreasing demand,
the company decided to shut down its mines with higher cost and lower quality
while maintaining operational flexibility at the other mines.

The production of iron pellets registered an even worse decrease in the
first quarter, totaling 2.885 million metric tons, down 69.9 percent from the
fourth quarter 2008 and 73.4 percent from the same period last year.

Due to the weak demand, Vale kept only three of its nine pellet production
units in operation in the quarter. In March, two other units restarted operation
under an increased demand for iron pellets from China.

Manganese ore production in the first quarter was 113,000 metric tons, down
79.2 percent from the same period last year. Vale's largest manganese mine Azul
was shut down for almost the entire quarter due to the decrease of demand.

The output of ferroalloys totaled 48,000 metric tons, down 63.6percent from
the same period in 2008. Nickel 65,200 metric tons, down 10.9 percent from the
last quarter but up 7.3 percent from the same period last year.

Vale has already laid off 1,300 employees since the end of 2008 because of
the crisis. Another 5,500 employees were given collective vacations. The company
entered into an agreement with several trade unions recently, which foresaw no
dismissals until May 31. It is still not known whether the agreement will be
renewed.

Bank of China Q1 net profit down 14.41% on writedowns for toxic assets

BEIJING, April 28 (Xinhua) -- Bank of China, the country's third largest lender by market value, said Tuesday its first-quarter net profit fell 14.41 percent from a year ago on writedowns of sub-prime-related assets.

Net profit in the first three months stood at 18.57 billion yuan (2.73 billion U.S. dollars), or 0.07 yuan per share, down from 21.7 billion yuan, or 0.09 yuan, a year earlier.

The bank wrote down the value of sub-prime-related assets and other securities by 378 million U.S. dollars in the first three months, bringing the funds set aside for toxic assets up to 4.84 billion U.S. dollars, the bank said in its first-quarter report.

The bank still held 2.2 billion U.S. dollars in U.S. sub-prime-mortgage investments, 1.05 billion U.S. dollars in securities backed by Alt-A home loans, 3.2 billion U.S. dollars of "non-agency" mortgage investments and 3.4 billion U.S. dollars of Freddie Mac and Fannie Mae securities, as of March 31.

Non-agency mortgage refers to mortgage-backed securities not issued by government sponsored enterprises (GSEs) such as Freddie Mac and Fannie Mae.

The lender's domestic institutions extended 569.4 billion yuan of yuan-denominated new loans in the first quarter, up 24 percent from the end of last year, as the country's banks have been instructed to make more loans in a bid to stimulate the slowing economy.

Yuan-denominated customer deposits increased 18 percent from the end of last year to 723.1 billion yuan in the first quarter, it said.

However, the bank's income from interest declined 9.74 percent from a year ago to 36.84 billion yuan in the first three months.

The bank said it adjusted its holding of foreign currency-denominated assets down by 6 percentage points to 29 percent of the total in the first quarter.

The non-performing loan ratio was 2.24 percent at the end of March, 0.41 percentage points lower than the end of last year, with outstanding non-performing loans at 85.13 billion yuan.

The bank's shares closed at 2.76 HK dollars in Hong Kong Tuesday, unchanged from the previous close. Shares in Shanghai edged up 0.29 percent to 3.47 yuan. Trading in Shanghai ended before the lender's first-quarter results were announced.